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1
Volume 15 January 2005 Number 1
There are several changes to USPAP
for 2005. The definition of APPRAISAL
REVIEW was changed to limit the defini-tion
only to the work of another appraiser
in appraisal, appraisal review or appraisal
consulting assignments. The definition of
CASH FLOW ANALYSIS and the comment
in the definition of REPORT were deleted.
The term “ purpose” was replaced
with the use of the terms type and defini-tion
of value, intended use or problem to
be solved. This is especially noted in Rules
1- 2 ( c) and 2- 2( a)( v), ( b)( v) and ( c)( v),
where a requirement has been added for
the appraiser to include the citation for the
source of the value definition used.
Rules 1- 3( b) has been amended to
remove the requirement in the develop-ment
of highest and best use that land
must always be valued as if vacant and
available for development. This does not
mean that appraisers do not have to devel-op
an opinion of the subject land. The
Appraisal Standards Board has stated that
this requirement is one of methodology,
which is covered by Rule 1- 1( a).
Rules 2- 1, 2- 2 and 3- 2 have been
amended to require clear and conspicuous
disclosure of extraordinary assumptions
and hypothetical conditions. The require-ment
that the appraiser indicate the
impact on value of an extraordinary
assumption or hypothetical condition has
been deleted.
Rule 2- 2 has been clarified regarding
reporting requirements for reconciliation.
Rule 2- 3, the appraiser’s certification,
has been amended to require that the cer-tification
state whether any one has pro-vided
significant real property appraisal
assistance. Formerly this section required
the appraiser to mention any person who
gave significant professional assistance.
In Standard 3, a clarification was
made that this standard applies only to the
work of another appraiser in an appraisal,
appraisal review or appraisal consulting
assignment. Previously, this standard
applied to another’s appraiser’s work.
Two Statements on Appraisal Stand-ards
were amended. Statement 6 was
changed to delete the requirement to
report exposure time in all assignments.
The appraiser is still required to develop
an estimate of exposure time in market
value assignments. Statement 7 was
changed to correctly address levels of reli-ability.
Previously this Statement indicated
that a Complete Appraisal had the highest
level of reliability, while Limited Ap-praisals
had varying levels of reliability.
This language has been eliminated.
Advisory Opinion 6 has been retired,
and changes were made to Advisory
Opinion 21 to clarify an appraiser’s obliga-tions
for complying with USPAP.
Finally, one potentially important
issue is noticed on the cover of the 2005
edition of USPAP. This edition is not limit-ed
to just the calendar year 2005. It is
entirely possible that either there will not
be a 2006 edition, or that the 2006 edition
will not become effective until some time
after January 1, 2006.
The 2005 edition of USPAP may be
viewed on the Appraisal Foundation’s
website at www. appraisalfoundation. org.
The Appraisal Board has worked
many years in anticipation of con-structing
or purchasing an office build-ing
as additional space is needed and
rents continue to increase. The Board
purchased a building site some two
years ago and began developing plans
for a new office building. An architect
was employed after receiving bids and
conducting interviews. Many hours
have been devoted to developing
plans for a building containing approx-imately
14,000 square feet of modern
design with size to meet our needs
now and in the future. Competitive
sealed bids were received and a con-tract
was recently negotiated and
signed to begin construction which is
anticipated to take one year. The loca-tion
of the new office is approximately
1.5 miles north of the existing office
directly on Six Forks Road in North
Raleigh. The Board and staff will be
able to better serve all licensees with
this new facility which is considered
financially feasible after analyzing
future space needs and rent rates in
the Raleigh area.
2005 Changes To USPAP
New Board Building BOARD NEWS
The Appraisereport will be published in January
and July each year with an expanded amount of in-formation
and all disciplinary actions of the Board. The
Board website at www. ncappraisalboard. org will be
updated and expanded to include any pertinent
monthly news and all disciplinary actions. These
changes are being made in an effort to improve com-munications
with licensees and to better utilize our
website. More information will be published as we
work to develop online renewals and the electronic
transmission of various forms.
New Employee
Christy Henson began employment in January as a part- time office assistant. Ms.
Henson has a BSBA degree from the University of Florida and an MBA degree from
Fuqua School of Business, Duke University. She will be working primarily with Legal
Counsel and the Deputy Director of Investigations. Ms. Henson is involved as a vol-unteer
in many organizations and she and her family make their home in Wake
Forest.
Reciprocity
North Carolina and Virginia signed a reciprocal licensing agreement allowing
appraisers from both states to obtain an appraisal license or certificate in the other
state in a streamlined manner. For a complete list of states North Carolina holds
reciprocal agreements with, please visit the Board’s website at: http:// ncappraisal-board.
org/ reciprocity/ default. htm
Note: Reciprocal agreements do not apply to trainees.
Top Trainee Problems
You became a trainee a few years ago, worked under the supervision of an apprais-er
and compiled the correct amount of appraisal experience. You send in your appli-cation
to upgrade your status, but then receive a letter from the Appraisal Board stat-ing
that your application is being returned because you do not have enough points
to qualify to upgrade. What happened?
In order to receive experience credit, the appraisals you have done must have been
made in compliance with USPAP and applicable state laws and rules. Unfortunately,
in too many instances trainees have not made sure that their supervisor has com-plied
with Board rules when performing supervision. What can a trainee do to make
sure the appraisals will be counted?
1. Make sure that your supervisor has sent in the supervisor declaration form to
the Appraisal Board before you begin work with that supervisor. Although
you can have more than one supervisor, each supervisor must be on record
as a supervisor, or reports done for a supervisor not on record will not be
given credit. Do not wait to begin employment before checking that the
Appraisal Board has received the form and documented the supervision in
both of your files.
2. Make sure that either you sign the appraisal report, or, if you do not sign the
report, that the appraisal report states that you have provided significant real
estate appraisal assistance in the preparation of the report.
3. Keep a copy of the appraisal report for your own records, or have an agree-ment
in writing with your supervisor that the supervisor will give you a copy
of any appraisal report you work on if you ask for it.
4. Make sure that a supervisor accompanied you on the first 50 appraisals you
did once you are registered.
5. Make sure your supervisor goes with you on all inspections of the subject
property, no matter how many appraisals you have done, if the property is
located more than 50 miles from the supervisor’s primary business location.
6. Make sure that your supervisor completes the Supervisor Verification of
Experience form for all appraisals you do, and that you have a copy of that
form for each appraisal.
7. Make sure that you are using the most recent Appraisal Board appraisal log to
report your experience. Older versions will not be accepted.
2
Published as a service to appraisers to promote a bet-ter
understanding of the Law, Rules and Regulations,
and proficiency in ethical appraisal practice. The arti-cles
published herein shall not be reprinted or repro-duced
in any other publication, without specific refer-ence
being made to their original publication in the
North Carolina Appraisal Board Appraisereport.
NORTH CAROLINA
APPRAISAL BOARD
Mailing Address:
P. O. Box 20500
Raleigh, North Carolina 27619- 0500
Street Address:
3900 Barrett Drive, Suite 101
Raleigh, North Carolina 27609
Phone: 919/ 420- 7920
Fax: 919/ 420- 7925
Website:
www. ncappraisalboard. org
Email Address:
ncab@ ncab. org
Michael F. Easley, Governor
APPRAISAL BOARD MEMBERS
Henry E. Faircloth
Chairman . . . . . . . . . . . . . . . . . . . . . Salemburg
Earl M. Worsley, Jr.
Vice- Chairman . . . . . . . . . . . . . . . . Wilmington
Bart Bryson . . . . . . . . . . . . . . . . . Hendersonville
Charles K. Hinnant . . . . . . . . . . . . . . . . . . . Kenly
E. Ossie Smith . . . . . . . . . . . . . . . . . . . . . . Oxford
J. Vance Thompson . . . . . . . . . . . . . . . . . . . Elkin
Larry N. Wright . . . . . . . . . . . . . . . . . . . . Candler
STAFF
Philip W. Humphries, Executive Director
Roberta A. Ouellette, Legal Counsel
Matthew W. Green, Deputy Director
Donald T. Rodgers, Deputy Director
Donna K. Krites, Investigator
Preston “ Buddy” Tucker, Investigator
Kim N. Giannattasio, Administrative Assistant
Lynn White, Appraiser Secretary
Paula Ford, Appraiser Clerk
Christy Henson, Office Assistant
APPRAISER COUNT
( As of January 24, 2005)
Trainees . . . . . . . . . . . . . . . . . . . . . . . . . . . 1235
Licensed Residential . . . . . . . . . . . . . . . . . . . 388
Certified Residential . . . . . . . . . . . . . . . . . . 1837
Certified General . . . . . . . . . . . . . . . . . . . . . 935
Total Number . . . . . . . . . . . . . . . . . . . . . . 4395
APPRAISER
EXAMINATION RESULTS
July- December 2004
Examination Total Passed Failed
Trainee 207 148 59
Licensed Residential 32 29 3
Certified Residential 54 31 23
Certified General 14 5 9
Examinations are administered by a national testing
service. For information, please contact the North
Carolina Appraisal Board in writing at
P. O. Box 20500, Raleigh, NC 27619- 0500.
On February 20, 2004, the
Appraiser Qualifications Board of The
Appraisal Foundation adopted changes
to the Real Appraiser Qualification
Criteria that will become effective on
January 1, 2008. These changes repre-sent
the minimum national require-ments
that each state must implement
for individuals applying for a real estate
appraiser license or certification as of
January 1, 2008. The changes include
increased required education, which is
summarized as follows:
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Important Changes To Appraiser Qualifications!!!
Current 1/ 1/ 08
Category Requirements Requirements 1/ 1/ 08 College- Level Course Requirements
License 90 Hours 150 Hours None
Certified Residential 120 Hours 200 Hours Twenty- one ( 21) semester credit hours covering the following
subject matter courses: English Composition; Principles of
Economics ( Micro or Macro); Finance; Algebra, Geometry or
higher mathematics; Statistics; Introduction to Computers- Word
Processing/ Spreadsheets; and Business or Real Estate Law. In
lieu of the required courses, an Associate degree will qualify.
Certified General 180 Hours 300 Hours Thirty ( 30) semester credit hours covering the following subject
matter courses: English Composition; Micro Economics; Macro
Economics; Finance; Algebra, Geometry or higher mathematics;
Statistics; Introduction to Computers – Word Processing/
Spreadsheets; Business or Real Estate Law; and two ( 2) elective
courses in accounting, geography; ag- economics; business man-agement;
or real estate. In lieu of the required courses, a
Bachelors degree will qualify.
The Appraiser Qualifications Board
( AQB) of the Appraisal Foundation has
adopted new standards for education
for appraisers effective January 1, 2008.
As of that date, applicants seeking to be
licensed or certified appraisers must
have substantially more education than
is currently required. Questions have
arisen regarding education obtained
before January 1, 2008.
There are two options for imple-mentation
of this change. The first
option, the “ drop dead’ or “ firm date”
option, requires that before any license
or certificate can be issued on or after
January 1, 2008, the applicant must
meet the new education requirement.
The second option, the “ segmented”
option, breaks down certification into
three components: education, experi-ence,
and examination.
The North Carolina Appraisal
Board has adopted the segmented
option in North Carolina.
Under the segmented option, an
applicant must meet the criteria in
effect at the time the segment is com-pleted,
not the criteria in effect when
the application is filed or when the
license or certificate is issued. For
example, if a state- certified residential
appraiser currently desires to upgrade
to state- certified general, he or she must
complete an additional 60 hours of edu-cation,
consisting of G- 2 and G- 3, and
pass the examination. Under the seg-mented
approach, if the appraiser takes
the additional 60 hours before January
1, 2008, he or she does not have to com-ply
with the new 2008 educational
requirement.
The examination to become a
licensed or certified appraiser will be
changed effective January 1, 2008. If an
applicant completes his or her educa-tion
prior to January 1, 2008 and files an
application with the Board, the old
examination can be taken up to and
including December 31, 2007. If the
applicant does not pass the examina-tion
before January 1, 2008, the appli-cant
will have to take and pass the new
examination.
Segmented Option For 2008 Appraiser
Education Changes
2005
Board Meeting Dates
January 18- 19
February 15- 16
March 15- 16
April 19- 20
May 17- 18
June 21- 22
July 19- 20
August 16- 17
September 20- 21
October 18- 19
November 15- 16
December 13- 14
The Office of the Commissioner of
Banks ( OCOB) provided the following
guidance on their agency’s procedures
for handling unpaid appraisal
complaints.
The following provisions of the
Mortgage Lending Act require brokers
and lenders to promptly pay, when due,
fees for appraisals they requested be
done. This same statute also prohibits
them from attempting to inappropriately
direct an appraiser in the performance
of his/ her job.
§ 53- 243.11. Prohibited activities.
In addition to the activities prohibit-ed
under other provisions of this
Article, it shall be unlawful for any per-son
in the course of any mortgage loan
transaction:
( 9) To fail promptly to pay when
due reasonable fees to a licensed ap-praiser
for appraisal services that are:
a. Requested from the appraiser in
writing by the mortgage broker or
mortgage banker or an employee of
the mortgage broker or mortgage
banker; and
b. Performed by the appraiser in
connection with the origination or
closing of a mortgage loan for a cus-tomer
or the mortgage broker or
mortgage banker.
( 11) To influence or attempt to influ-ence
through coercion, extortion, or
bribery, the development, reporting,
result, or review of a real estate ap-praisal
sought in connection with a
mortgage loan. Nothing in this subdivi-sion
shall be construed to prohibit a
mortgage broker or mortgage banker
from asking the appraiser to do one or
more of the following:
a. Consider additional appropriate
property information.
b. Provide further detail, substan-tiation,
or explanation for the
appraiser’s value conclusion.
c. Correct errors in the appraisal
report.
If a licensed broker or lender en-gages
in these prohibited activities, they
are subject to penalties or loss of license
under the Mortgage Lending Act.
Unpaid appraisal complaints are
processed by the Consumer Assistance
Group if at least ninety days have
passed from the date the fee was due
( most often near or at closing) and sup-portive
documentation is included i. e.,
the appraisal request form, past due
invoice, any related written contracts,
and evidence of collection attempts. We
will not reject any complaint filed soon-er
than this, but will ( i) hold it as “ pend-ing”
and ( ii) generate a response letter
addressed to the complaining appraiser
requiring the complainant to contact us
again at or after the 91st day if he or she
still hasn’t been paid. We expect the
appraiser to have exhausted all reason-able
means of collecting the outstanding
balance before submitting a complaint
to our office. Our office will not under-take
to adjudicate disputes between an
appraiser and lender/ broker. One way
to ensure that no facts are in dispute is
to obtain a judgment against the lender/
broker prior to submitting a complaint
to this office.
The OCOB advises appraisers to
use its website www. nccob. com to veri-fy
their client is licensed as a mortgage
lender/ broker before submitting a com-plaint.
Real estate and property man-agement
companies, national banks,
federally chartered thrifts, credit
unions, and certain entities of those
wholly owned subsidiaries are not
required to be licensed by the OCOB;
thus, the OCOB has limited jurisdiction
over them.
Once a complaint has been filed
with supporting documentation, the
Consumer Assistance Group sends a let-ter
to the respondent requesting a writ-ten
response within three weeks. Upon
receipt of the response, it is reviewed to
determine if the complaint has been
resolved or if continued investigation is
needed. As stated, failure to follow the
law may have serious consequences for
the lender/ broker; however, this office
does not view itself as a collection agen-cy
for appraisers. Appraisers need to
take some responsibility to check out
the clients and discontinue working for
them if not paid in a timely manner.
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Information from the Office of the Commissioner
of Banks for Real Estate Appraisers
RULEMAKING
IN PROGRESS
The Appraisal Board has be-gun
the process of changing
some of its rules. The pro-posed
text of the rules will be
published in the March 15,
2005 edition of the North
Carolina Register, which
can be viewed on line at
http:// www. ncoah. com/ rules/
register/. A public hearing
will be scheduled for some
time after that date. Check
the Board’s website for up- to-date
information.
In Memory
Pioneer member of the
North Carolina Appraisal Board,
William G. Brown,
passed away July 9, 2004.
Mr. Brown served a
three- year term beginning
in 1991 after appointment by
former Governor Jim Martin.
Adopted December 14, 2004
Many appraisals require the ap-praiser
to measure structures, calculate
areas and report the results. These
actions are an important component in
development of the cost, sales and
income approaches to value. Many
provisions of the Uniform Standards
of Professional Appraisal Practice
( USPAP) apply to measurement, area
calculation and description of property
improvements, including the ETHICS,
COMPETENCY, JURISDICTIONAL EX-CEPTION,
and SUPPLEMENTAL STAND-ARDS
RULES, as well as Standards
Rules 1- 1( a), ( b) and ( c), 1- 2( e)( i), 2- 1( a)
and ( b), and 2- 3.
The appraiser’s objective must be
to measure accurately, calculate compe-tently,
and describe the various areas of
an improvement in a manner that is not
misleading and facilitates understand-ing
of the property. The North Carolina
Appraisal Board recognizes that assign-ments
from various clients and for vari-ous
purposes may require adherence to
specific supplemental standards for
measurement, calculation and descrip-tion.
Appraisers may need to utilize,
among others, supplemental standards
imposed by courts, secondary mortgage
market or mortgage guaranty agencies,
or other governmental agencies.
No one scheme for measuring, cal-culating
areas and describing improve-ments
can perfectly address all the var-ied
designs and construction types
found in North Carolina real estate. For
each method, exceptions are easily
identified. No one standard or method-ology
can measure market reaction.
Thus, responsibility lies with appraisers
to engage their experience and judg-ment
so as to apply supplemental stan-dards
and methodologies relating to
square footage in a manner that is not
misleading and does not conflict with
the Uniform Standards of Professional
Appraisal Practice.
The North Carolina Appraisal
Board recognizes, but does not require
adherence to, ANSI Standard Z765- 2003,
titled “ American National Standard for
Single- Family Residential Buildings”,
“ Square Footage- Method for Calculat-ing.”
In addition, the Appraisal Board
recognizes, but does not require adher-ence
to, the Residential Square Footage
Guidelines published by the North
Carolina Real Estate Commission
( known as the “ yellow book”). The
Appraisal Board considers that using
either of the above standards as
guidelines for measuring and calcu-lating
areas is appropriate appraisal
methodology.
In certain assignments the apprais-er
may be required to rely on subject
property measurements, calculations
and descriptions supplied by clients, or
obtained from other sources such as
governmental agencies, builders, archi-tects,
engineers or marketing organiza-tions.
Such reliance should be ex-plained
in the scope of work of the
appraisal. When the appraiser relies on
data developed by others, this fact must
be clearly disclosed in the report.
The description of areas below
grade has been an item of controversy
for many years. Appraisers should exer-cise
care when describing areas which
may be characterized as basement, gar-den
level, semi- basement, walk out
basement, or the like. At times, addi-tional
photographs may be advisable to
assist the reader in understanding the
subject property. A description of the
level of finish may also assist recipients
of reports. These cautions have particu-lar
application to hillside and multi- level
structures.
Note: The ANSI Standard may be
ordered from:
NAHB Research Center, Inc.
400 Prince George’s Boulevard
Upper Marlboro, MD 20774- 8731
Inquiry Phone: ( 301) 249- 4000
Order Phone: 1- 800- 638- 8556
An online version is available at:
www. nahbrc. org/ bookstore
The Residential Square Footage Guide-lines
may be ordered from:
North Carolina Real Estate
Commission
PO Box 21500
Raleigh, NC 27619
( 919) 875- 3700
An online version is available at:
http:// www. ncrec. state. nc. us/
5
Appraisal Board Guidelines on Measurement,
Calculation and Reporting of Square Footage of
Residential Improvements to Real Estate
RENEWAL NOTICES
The Appraisal Board will mail renewal notices to
licensees in early May. This will be the only renew-al
notification appraisers will receive from the
Board’s office. Renewal fees and forms must be
submitted by June 30th to avoid late fees.
Who is my client? What are my obliga-tions
to my client? When do those obliga-tions
end? Can my client have me reassign
the report to others? Can I appraise the
same property for a different client? What if
the lender hires me but the homeowner
pays my fee at the door? These are some of
the many questions we receive regarding the
appraiser- client relationship.
Question 1. I recently performed an
appraisal on a subject property for a lender,
and now a mortgage broker has contacted
me to ask me if I can transfer the report to
him. He wants to have a different lender’s
name placed in the client line. He says he
has the permission of the first lender for me
to do this. Is this okay under USPAP?
Answer: No. Once a report has been
prepared for a named client, the apprais-er
cannot readdress or transfer the report
to another party. Simply changing the
client name on the report cannot change
or replace the original appraiser- client
relationship that was established with the
first client. See Advisory Opinion 26 for
more information.
Question 2. I know that I cannot
transfer a report from one client to another,
but I get calls all the time asking me to do
this. Is there any way I can accept the assign-ment
and comply with USPAP?
Answer: Yes. The appraiser can con-sider
the request a new assignment and es-tablish
a new appraiser- client relationship
with the second client. See Advisory Opin-ion
27 for more information.
Question 3. I recently performed an
appraisal on a subject property and a
new lender contacted me to request a sep-arate
but complete appraisal on the same
property. Can I do this new assignment?
Answer: Yes. As long as the ap-praiser
does not use any confidential infor-mation
given to him or her by the first client,
the appraiser can accept an assignment to
appraise the same property for a different
client. See Advisory Opinion 27 for more
information.
Question 4. The lender hired me to
do an appraisal, and told me to collect at
the door. The homeowners paid my fee,
and now they want a copy of the report.
What can I do?
Answer: USPAP defines the client as
“ the party or parties who engage an apprais-er
( by employment or by contract) in a spe-cific
assignment”. The determining factor is
not who pays for the appraisal or how it is
paid, but who contacted the appraiser in the
first place and placed the appraisal order.
For a federally- related transaction, federal
law requires the lender to be the one to
engage the appraiser’s services. In many, if
not most cases, the homeowner pays for the
appraisal either directly to the appraiser or
indirectly through the lender, thus payment
for services is not the determining factor. In
the above scenario, it is the lender who is
the client, not the homeowner, and the
appraiser cannot give a copy of the report to
the homeowner without the lender’s
consent.
Lenders are required by federal law
( the Equal Credit Opportunity Act) to fur-nish
a copy of the appraisal to the borrower
if the borrower requests a copy in writing.
This applies to both consumer and business
loans for which real estate will be collateral.
If the homeowner wants a copy of the ap-praisal,
they can be told to contact the
lender directly or the appraiser can ask the
client for permission to send a copy.
Question 5. A mortgage broker
hires me to appraise a property. The bro-ker
asks that his name not be used as the
client, but that I instead identify the
client as a local lender on the written
appraisal report. The mortgage broker’s
name or relationship to the parties is not
to be mentioned in the report. Can I do
this?
Answer: Once an appraiser places a
client name on the appraisal report, that per-son
or company is the client, resulting in an
appraiser- client relationship. If a mortgage
broker wants an appraiser to perform an ap-praisal
on a property that will then be offered
to several lenders, the appraiser should not
submit an appraisal report naming anyone
other than the broker as the client. The
appraiser could state that intended users
include lending institutions, without naming
any one lender. If the appraiser does state a
client name in the appraisal report, the
appraiser cannot simply change the name of
the client and submit the appraisal to a new
lender ( See Question 1 above).
Question 6. What if it is the home-owner
who engages my services and
wants me to put a lender’s name on the
report as the client?
Answer: First of all, before the ap-praiser
accepts the assignment, the apprais-er
must disclose to the homeowner that a
lender or its agent is required to directly
engage the services of an appraiser in a fed-erally-
related transaction. The appraiser
should make it clear to the homeowner that
a lender may not accept the report even if he
states on the report that the lender is the
client. Also, the homeowner should be
informed that once the appraiser states in
the report the name of the client, the
appraiser cannot change the name of the
client on the report.
For more information on these and
other questions, see Advisory Opinions 26
and 27.
Analyzing and Reporting
of Exposure Time
Question 1. Why was language in
STATEMENT No. 6 related to the reporting of
exposure time deleted from USPAP?
Answer: The following passage,
The discussion of reasonable exposure
time should appear in an appropriate
section of the appraisal report, one that
presents the discussion and analysis of
market conditions, and also be refer-enced
at the statement of the value defi-nition
and at the value conclusion.
was deleted from STATEMENT No. 6
Reasonable Exposure Time in Real Property
and Personal Property Market Value Opinions
because:
6
Reissuing Or Assigning An Appraisal Report
USPAP
Questions &
Answers
• USPAP requires that each real property
and personal property appraisal report
contain sufficient information to enable the
intended users of the appraisal to under-stand
the report properly. Meeting this
requirement does not require the reporting
of exposure time in all assignments;
• The amount of detail in which exposure
time is reported should be determined
based on the intended user, the intended
use and the type and definition of value. It
should not be a “ one- size- fits- all” reporting
requirement for every appraisal assign-ment;
and
• The reporting requirement for all com-ments
related to the definition of value,
including exposure time, is incorporated
in the Comment to Standards Rules 2-
2( a)( v), 2- 2( b)( v), 8- 2( a)( v), and 8- 2( b)( v),
which states:
Stating the definition of value requires the
definition itself, an appropriate reference
to the source of the definition, and any
comments needed to clearly indicate to
the reader how the definition is being
applied. ( bold added for emphasis)
If disclosure of the exposure time is nec-essary
for intended users to understand
the report, this reporting requirement
necessitates inclusion of an appropriate
discussion.
Note: The deletion in STATEMENT No. 6
related to the reporting of exposure time
does not change the development require-ment
to analyze exposure time if the value
opinion to be developed is market value, i. e.,
Standards Rules 1- 2( c)( iv) and 7- 2( c)( iv).
Appraising Land
Question 2. I am appraising a prop-erty
improved with an apartment complex,
but have found that the land is zoned for
commercial use. My research indicates that
such commercial land would have a value
different from that of apartment land, but
still far less than the current total value of
the apartment complex.
According to USPAP, how should I value
the land?
Answer: USPAP does not dictate the
use of any particular theory or technique.
You may apply any method, as long as it is
recognized, applicable, and correctly
employed. SR 1- 1( a) only requires the
appraiser to correctly employ those recog-nized
methods and techniques that are neces-sary
to produce a credible appraisal.
Edits to the 2005 edition of USPAP re-sulted
in the elimination of language in the
Standards Rules that appeared to require a
particular theory.
Type and Definition of Value,
and Citation of Source
Question 3. USPAP requires appraisal
reports to identify the type and definition of
value and cite the source of the definition.
What is the “ type of value?” Why is this no
longer referred to as the “ purpose” of the
assignment? What sources can be used to
comply with the requirement to cite the
source of the definition of value?
Answer: STANDARDS 2, 6, 8 and 10
require that appraisal reports state the type
and definition of value and cite the source of
the definition. The exact wording varies by
reporting option.
Previously, the term “ purpose” in
USPAP was used to refer to several different
concepts, including the type and definition
of value. For the 2005 edition of USPAP, this
and other special meanings of this term
were eliminated to increase clarity. Where it
is now used “ purpose” will only convey the
standard dictionary meaning of the word.
The “ type of value” is the general class
or category of value. Examples include mar-ket
value or fair value.
The “ definition of value” provides a
specific description of the characteristics
and conditions of the type of value.
Examples include definitions provided on a
form report, in FIRREA, in U. S. accounting
regulations, and U. S. tax regulations.
USPAP does not provide any specific
definition of value or endorse any particular
source. Sources could include, for example,
a regulatory agency, a legal jurisdiction, an
engagement letter, or a textbook.
Reporting Use of Extraordinary
Assumptions and Hypothetical
Conditions
Question 4. What are the USPAP re-porting
requirements relating to the use of
extraordinary assumptions and hypothetical
conditions in an appraisal assignment?
Answer: The report must clearly dis-close
the use of extraordinary assumptions
and hypothetical conditions and notify
intended users that the extraordinary
assumptions and hypothetical conditions
might have affected the assignment results.
For example, Standards Rule 2- 1 ( c) states
that each written or oral real property
appraisal report must:
clearly and accurately disclose all assump-tions,
extraordinary assumptions, hypo-thetical
conditions, and limiting conditions
used in the assignment. ( bold added for
emphasis)
This requirement creates an obligation to dis-close
all extraordinary assumptions and hypo-thetical
conditions used in the assignment.
For example, Standards Rule 2- 2 ( a)( viii)
states that Self- Contained Appraisal Report
must, at a minimum:
( viii) clearly and conspicuously:
• state all extraordinary assumptions
and hypothetical conditions; and
• state that their use might have affect-ed
the assignment results; ( bold
added for emphasis)
This requirement directs the appraiser
to provide a clear and conspicuous state-ment
of the extraordinary assumptions and
hypothetical conditions. The form and loca-tion
of the statement is left to the discretion
of the appraiser, but it must be clear and
conspicuous to intended users.
The requirement further directs the
appraiser to provide notice to intended
users that the use of the extraordinary
assumptions and hypothetical conditions
might have affected the assignment results.
The appraiser is not required to report on
the impact of the extraordinary assumptions
and hypothetical conditions on assignment
results.
Note: The requirements for other report
types are similar. Neither appraiser is
required to have custody of the workfile.
However, an appraiser who does not have
custody must make appropriate arrange-ments
for retention, access, and retrieval.
For further information, regarding USPAP
Q& A, please contact: John S. Brenan,
Director of Research & Technical Issues, The
Appraisal Foundation, 1029 Vermont Avenue
NW, Suite 900, Washington, DC 20005. ( 202)
624- 3044 ( 202) 347- 7727, fax.
7
8
A. JOSH TUNNELL, JR.
P. O. Box 554
Elizabeth City, NC 27907- 0554 ( 252) 335- 5219
National USPAP Update ( 7/ 7)
Working with Underwriters ( 7/ 7)
ALAMANCE COMMUNITY COLLEGE
P. O. Box 8000
Graham, NC 27253 ( 336) 578- 2002
Appraising Small Residential Income Properties ( 10/ 10)
Intro to Commercial Real Estate ( 4/ 4)
New Exstg Residential Codes Affecting RE Appr ( 10/ 10)
Real Estate Finance ( 4/ 4)
ALLEN TATE SCHOOL OF REAL ESTATE –
A DAN MOHR SCHOOL
6632 Fairview Road
Charlotte, NC 28210 ( 704) 362- 2296
Mfg/ Mod Homes & Real Property ( 7/ 7)
National USPAP Update ( 7/ 7)
New Rules & Regs FHA/ HUD ( 14/ 14)
Residential Construction Seminar ( 14/ 14)
Staying Out of Trouble – NC Ap ( 7/ 7)
ALLSTATE HOME INSPECTION
TRAINING INSTITUTE
Route 1, Box 130
Randolph Center, VT 05061 ( 800) 245- 9932
Environmental Awareness Seminar ( 8/ 8)
FHA Test Preparation ( 8/ 8)
Introduction to Home Inspection ( 8/ 8)
USPAP Refresher ( 8/ 8)
AMERICAN SCHOOL OF REAL
ESTATE APPRAISERS
P. O. Box 275
Cherryville, NC 28021 ( 704) 435- 1111
National USPAP Update ( 7/ 7)
Value? What Value? ( 4/ 4)
AM SOC FARM MANGRS & RURAL
APPRAISERS
950 S. Cherry Street, Suite 508
Denver, CO 80222 ( 303) 758- 3513
A- 12 Part 1 ASFMRA Code of Ethics ( 7/ 7)
A- 12 ( III) National USPAP Update ( 7/ 7)
Eminent Domain A- 25 ( 19/ 19)
Highest & Best Use A- 29 ( 15/ 15)
Advanced Appraisal Review A- 35 ( 49/ 30)
Advanced Resource Appraisal A- 34 ( 30/ 30)
Appraising Agricultural Land in Transition ( 8/ 8)
Appraising Broiler Grower Far ( 16/ 16)
Appraising Rural Residential Properties ( 15/ 15)
Conservation Easements ( 16/ 14)
Rural Business Valuation ( 16/ 16)
Yllw Bk – Uniform Standards for Fed Land Acq ( 8/ 8)
AM SOCIETY OF APPRAISERS NC CHAPTER
159 Lake Ellen Drive
Chapel Hill, NC 27514 ( 919) 942- 2544
Appr Sm Residential Income Properties ( 7/ 7)
National USPAP Update ( 7/ 7)
The Appraisal of Small Subdivisions ( 7/ 7)
Using Marshall & Switf/ Res Prop ( 7/ 7)
APPRAISAL ACADEMY ( THE)
3802 N. University Street
Peoria, IL 61614 ( 309) 681- 8100
Limited Res Appr Assignment ( 4/ 4)
O/ L Fundamentals of Small Business Valuation ( 7/ 7)
O/ L Limiting Appraiser Liability Exposure ( 7/ 7)
O/ L Manufactured Home Appraising ( 7/ 7)
O/ L Tough Residential Appraisal Assignment ( 4/ 4)
APPRAISAL INSTITUTE
550 W. Van Buren Street, Suite 1000
Chicago, IL 60607 ( 312) 335- 4236
320 General Applications ( 39/ 30)
330 Apartment Appr: Cncpts & ( 14/ 14)
400 National USPAP Update ( 7/ 7)
410 National USPAP ( 15/ 16)
420 Business Practice and Ethic ( 7/ 7)
500 Adv Res Form & Narrative ( 40/ 30)
520 High & Best Use & Mkt Anal ( 40/ 30)
530 Adv Sales Comp & Cost Appr ( 40/ 30)
600 Inc Val of Sm Mixed- Use Prop ( 15/ 15)
610 Cst Val of Sm Mixed- Use Prop ( 15/ 15)
620 Sls Comp Val Sm Mixed- Use ( 15/ 15)
700 Appraisers as Expert Witness ( 15/ 15)
705 Litigation Appr: Spclzd Topics & ( 16/ 16)
710 Condemnation Appr: Basic Prin & ( 15/ 15)
720 Condemnation Appr: Adv Topics & ( 15/ 15)
800 Separating Real & Personal ( 15/ 15)
810 Computer- Enhanced Cash F ( 15/ 15)
Analyzing Commercial Lease c ( 7/ 7)
Appr Consulting: A Solutions Appr ( 7/ 7)
Appraising Manufactured Housing ( 7/ 7)
Appraising the Tough Ones ( 7/ 7)
Avoiding Liability as a Residential Appraiser ( 7/ 7)
Case Studies in Limited Partnership &
Common Tenancy Valuation ( 14/ 14)
Energy Prfrmnc & Commc Prpr ( 7/ 7)
Gen Demo Appr Rpt Writing Sem ( 7/ 7)
Intro to Income Capitalization ( 7/ 7)
Mathematically Modeling Real Est ( 7/ 7)
O/ L Eminent Domain & Condemnation ( 7/ 7)
O/ L 320: General Applications ( 7/ 7)
O/ L Course 400: 7- Hr National USPAP ( 7/ 7)
O/ L Course 420: Business Practices & Ethics ( 8/ 7)
O/ L Analyzing Distressed RE ( 4/ 4)
O/ L Analyzing Operating Expen ( 7/ 7)
O/ L Appraisal of Nursing Facilities ( 7/ 7)
O/ L Appraising from Blueprints ( 7/ 7)
O/ L Apartment Appraising, Concepts &
Applications ( 15/ 15)
O/ L Feasibility, Mkt Value, Investment ( 7/ 7)
O/ L Internet Search Strategies for R ( 7/ 7)
O/ L Intro to GIS Apps for RE App ( 7/ 7)
O/ L Overview of RE Appr Princip ( 7/ 7)
O/ L Res Design & Functional Uti ( 7/ 7)
O/ L Res Property Construction & In ( 7/ 7)
O/ L Sm Hotel/ Motel Val: Lmtd S ( 7/ 7)
O/ L The Cost Approach to Commercial Appraising ( 7/ 7)
O/ L The FHA and the Appr Proce ( 7/ 7)
O/ L Using Your HP12C Financial ( 7/ 7)
O/ L Val of Detrimental Conditions ( 7/ 7)
Rd Less Traveled: Spcl Purpose Pr ( 7/ 7
Res Demo Appr Report Writing S ( 7/ 7)
Scope of Work: Expanding Range ( 7/ 7)
APPRAISAL INSTITUTE, NC CHAPTER
2306 W. Meadowview Road, Suite 101
Greensboro, NC 27407 ( 336) 297- 9511
Appraising in NC ( 4/ 4)
Evaluating Residential Construction ( 8/ 8)
New Tech for RE Appr: Cool Tools ( 4/ 4)
Rates & Ratios: Making Sense of GIM’s, OAR’s & DCF’s
APPRAISAL. COM
334 Harris Hill Road
Buffalo, NY 14221 ( 716) 633- 2428
NOVA for Appraisers ( 7/ 7)
ASHEVILLE- BUNCOMBE TECH CC
340 Victoria Road
Asheville, NC 28801 ( 828) 254- 1921
National USPAP Update ( 7/ 7)
PDH RE - Basic Surveying ( 5/ 5)
The UDO: Regulating RE Use & Dev ( 4/ 4)
BILL GALLAGHER SCHOOL OF REAL ESTATE
380 Knollwood Street, Suite 420
Winston- Salem, NC 28103 ( 888) 778- 1245
Intro to Residential RE Investment ( 7/ 7)
The Appraiser As An Expert Witness ( 7/ 7)
BOB IPOCK & ASSOCIATES, INC.
1218 Heatherloch
Gastonia, NC 28054 ( 704) 807- 1985
Appraising In NC ( 4/ 4)
National USPAP Update ( 8/ 8)
BRUNSWICK COMMUNITY COLLEGE
P. O. Box 30
Supply, NC 28462 ( 910) 754- 6900
Manufactured Homes ( 7/ 7)
CARTERET COMMUNITY COLLEGE
3505 Arendell Street
Morehead City, NC 28557 ( 252) 222- 6127
Mold Inspectionas & Remediation ( 4/ 4)
CCIM INSTITUTE
430 N Michigan Avenue, 8th Floor
Chicago, IL 60611- 4092 ( 312) 321- 4473
C1101 Fin Analysis Comm Invest ( 30/ 30)
C1102 Market Analysis Comm In ( 30/ 30)
C1103 User Decision Analysis Comm ( 30/ 30)
C1104 Invest Analysis Comm Inv ( 30/ 30)
Introduction to Com Investment RE An ( 12/ 12)
CLARK REALTY SEMINARS
P. O. Box 61083
Virginia Beach, VA 23462 ( 888) 316- 7182
National USPAP Update ( 7/ 7)
RE Environmental Concerns ( 7/ 7)
CLE INTERNATIONAL
1620 Gaylord Street
Denver, CO 80206 ( 303) 377- 6600
Eminent Domain ( 13/ 13)
DAN MOHR RE SCHOOLS
1400 Battleground Avenue, Suite 150
Greensboro, NC 27408 ( 800) 639- 9813
Depreciation Workshop ( 7/ 7)
Environmental Hazards- Residential Prop ( 7/ 7)
Extraction of Data from Market Res ( 7/ 7)
HP 12C Course ( 7/ 7)
Intro to Residential Construction ( 30/ 30)
Mfg/ Modular Homes & Real Property Appr Review ( 7/ 7)
National USPAP Update ( 7/ 7)
Res Appr & Conventional Underwriting Guide ( 7/ 7)
Residential Construction Cost ( 7/ 7)
Residential Construction Seminar ( 14/ 14)
Rules & Regs FHA/ HUD Requirements ( 14/ 14)
Staying Out of Trouble – NC Ap ( 7/ 7)
The Narrative Appraisal Report ( 7/ 7)
Using Streamlined Appraisal Report Forms ( 7/ 7)
DUKE UNIVERSITY
A108B LSRC/ Box 90328
Durham, NC 27708 ( 919) 613- 8082
What’s it Worth - Forest Appraisal ( 36/ 30)
DYNASTY SCHOOL
2373 S. Hacienda Boulevard
Hacienda Heights, CA 91745 ( 800) 888- 8827
National USPAP Update ( 7/ 7)
EDGECOMBE CC
225 Tarboro Street
Rocky Mount, NC 27801 ( 252) 446- 0436
Appraising Manufactured, Modular & Mobile ( A) ( 7/ 7)
Appraising Manufactured, Modular & Mobile ( B) ( 7/ 7)
Cost Appr Marshall & Swift Res & Co ( 7/ 7)
Income Capitalization ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Manufactured, Modular & Mobile ( 4/ 4)
Narrative Appraisal Report Writing ( 14/ 14)
National USPAP Update ( 7/ 7)
Pricing Small Income Properties ( 4/ 4)
Principles & Techniques Val 2- 4 Units Res Prop ( 14/ 14)
Real Estate Finance for Appraisers ( 14/ 14)
Rural Valuation Seminar ( 14/ 14)
Single Family Residential Appraisal ( 14/ 14)
Standards of Professional Practice ( 15/ 15)
USPAP & NC Board Rules & Regs For ( 15/ 15)
ELLIOTT & COMPANY APPRAISES
3316- A Battleground Avenue
Greensboro, NC 27410 ( 336) 854- 3075
Nuts & Bolts of Appraising ( 14/ 14)
EMPLOYEE RELOCATION COUNCIL
1717 Pennsylvania Avenue NW # 800
Washington, DC 20006- 4665 ( 202) 862- 4236
Relocation Appr Training Prog ( 6/ 6)
Approved Continuing Education Courses
( As of January 5, 2005)
Listed below are the courses approved for appraiser continuing education credit as of date shown above. Course sponsors are listed alphabetically
with their approved courses. Shown parenthetically beside each course title are sets of numbers [ for example: ( 15/ 10)]. The first number indicates the
number of actual classroom hours and the second number indicates the number of approved continuing education credit hours. You must contact the
course sponsor at the address or telephone number provided to obtain information regarding course schedules and locations.
FOUNDATION OF RE APPRAISERS
2140 W. Chapman Avenue # 107
Orange, CA 92868 ( 714) 935- 1161
National USPAP Update ( 7/ 7)
HIGNITE TRAINING SERVICE
208 Gloria Street
Greenville, NC 27858 ( 252) 756- 7288
Appraisal FAQ’s ( 14/ 14)
National USPAP Update ( 7/ 7)
The Review and The Reviewer ( 7/ 7)
INSTITUTE OF GOVERNMENT, UNC CHAPEL
HILL
Knapp Building, CB# 3330
Chapel Hill, NC 27514 ( 919) 966- 4157
Appr of Commercial Prop in a Declining Market ( 7.5/ 7)
Appraisal of Land ( 30/ 30)
Assessment Administration ( 30/ 7)
Fundamentals of Assessment Ratio Studies ( 16/ 16)
Fundamentals of Mass Appraisals ( 30/ 30)
IAAO 101: Fundamentals of Real Prop ( 30/ 30)
IAAO 102: Inc Approach to Valuation ( 30/ 30)
Income Approach to Valuation II ( 30/ 30)
Marshall & Swift – Commercial ( 13/ 13)
Principles & Techniques of Cadestral Mapping ( 30/ 30)
Residential Modeling Concepts ( 30/ 30)
INTERNATIONAL RIGHT OF WAY
ASSOCIATION
19750 S. Vermont Avenue, Suite 220
Torrance, CA 90502- 1144 ( 213) 538- 0233
103 Ethics & Right of Way Profession ( 8/ 8)
403 Easement Valuation ( 8/ 8)
801 Land Titles ( 10/ 10)
JOHNSTON CC
P. O. Box 2350
Smithfield, NC 27577 ( 919) 934- 3051
Appraisal 2004 ( 7/ 7)
I’ve Got This House ( 7/ 7)
Manufactured Homes ( 7/ 7)
National USPAP Update ( 7/ 7)
JVI
222 South Westmonte Drive, Suite 206
Altamonte Springs, FL 32714 ( 407) 774- 3344
Appraising REO Properties
LENOIR CC
P. O. Box 188
Kinston, NC 28502- 9946 ( 252) 527- 6223
Appraising Manufactured, Modular, & Mobile ( A) ( 7/ 7)
Appraising Manufactured, Modular, & Mobile ( B) ( 7/ 7)
Challenging the Appraisal ( 4/ 4)
Cost Approach Marshall & Swift ( 7/ 7)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Maximizing Value ( 4/ 4)
National USPAP Update ( 7/ 7)
NC Rules & Regulation Update ( 7/ 7)
Pricing Complex Properties ( 4/ 4)
Pricing Small Income Properties ( 4/ 4)
Principles/ Techniques Val 2- 4 Unit Residential ( 14/ 14)
USPAP & NC Rules & Regulations for App ( 15/ 15)
M CURTIS WEST
P. O. Box 947
Zebulon, NC 27597 ( 919) 217- 8040
USPAP 2002/ 2003 ( 7/ 7)
MCKISSOCK APPRAISAL SCHOOLS
P. O. Box 1673
Warren, PA 26365 ( 814) 723- 6979
2- 4 Family Finesse: Appraising Multi- Family
Properties ( 7/ 7)
Appr For the Secndary Market ( 7/ 7)
Appraising High Value Residential Properties ( 7/ 7)
Appraisal Review ( 7/ 7)
Appraiser Liability ( 7/ 7)
Appraising the Oddball ( 7/ 7)
Disclosures and Disclaimers ( 7/ 7)
Does My Report Comply with USPAP? ( 7/ 7)
Legal Issues for Appraisers ( 7/ 7)
Lmtd Apprs & the Scope of Wk D ( 7/ 7)
Made in America: Apprising Factory Built Housing ( 7/ 7)
National USPAP Update ( 7/ 7)
National USPAP ( 15/ 15)
O/ L Appr for the Secondary Market ( 7/ 7)
O/ L Appraiser Liability ( 7/ 7)
O/ L Construction Details & Trends ( 7/ 7)
O/ L Factory- Built Housing ( 7/ 7)
RE Damages: Assessment & Testi ( 7/ 7)
Real Estate Fraud & Appraiser’s Role ( 7/ 7)
Residential Construction ( 7/ 7)
MEL BLACK
P. O. Box 459
Cherryville, NC 28021 ( 704) 435- 0753
2- 4 Family Properties ( 7/ 7)
Board Rules and Laws ( 7/ 7)
National USPAP Update ( 7/ 7)
Trainees & Supervisors ( 7/ 7)
Value? What Value ( 4/ 4)
MINGLE SCHOOL OF REAL ESTATE
P. O. Box 35511
Charlotte, NC 28235 ( 704) 372- 2984
Is This A Commercial Appraisal? ( 4/ 4)
NC RE Appr Act & Appraisal Board Rules ( 4/ 4)
Role of the Supervisory Appraiser ( 4/ 4)
MOULTRIE B. WATTS
P. O. Box 447
Cary, NC 27512 ( 919) 851- 2100
National USPAP Update ( 7/ 7)
NAIFA
7501 Murdoch Avenue
St. Louis, MO 63119 ( 314) 781- 6688
1.2 Dfndng, Dcmntng & Spprtng ( 4/ 4)
1.4B Commercial Report Writing ( 15/ 15)
11.8A Calculating Gross Living Area Using ( 7/ 7)
15.0 Intro to Automated Valuation Model Tech
Seminar ( 4/ 4)
15.1 Environmental Concerns Seminar ( 4/ 4)
16.0A Understanding Legal Des ( 4/ 4)
16.2C Appraisal of Foreclosure ( 4/ 4)
2.0 Financial Analysis Inc Property ( 15/ 15)
4.7B Preparing Your Listing for FHA ( 4/ 4)
5.0 National USPAP Update ( 7/ 7)
5.3 Scope of Work ( 8/ 8)
9.7 Fannie Mae Updated Prop & A ( 8/ 8)
9.7A Fannie Mae Update ( 4/ 4)
99.1A Fraud, Flip and the FBI ( 4/ 4)
99.7A Blue Print Reading Seminar ( 4/ 4)
Mobile/ Manufactured Home Re ( 8/ 8)
NC RE EDUCATION FOUNDATION ( NCAR)
4511 Weybridge Lane
Greensboro, NC 27407 ( 800) 443- 9956
Legal Issues in Real Estate ( 7/ 7)
National USPAP Update ( 7/ 7)
Residential Construction ( 7/ 7)
Residential Real Estate as an Investment ( 7/ 7)
Tax Planning for the Real Estate Agent ( 7/ 7)
NCDOT
1605 Westbrook Plaza Drive, Suite 301
Winston- Salem, NC 27103 ( 336) 760- 1925
Apply Marshall & Swift and Valuing Medical/
Assisted Living Facilities ( 7/ 7)
Appr Board Speaks to You/ Ct Rm Eti ( 7/ 7)
Appraisal of Residue & Special Use Properties ( 7/ 7)
National USPAP Update ( 7/ 7)
NC Rules & Regulations – USPAP Update/ Avd Ltg ( 7/ 7)
Revisiting the Cost Approach & Recurring Errors ( 7/ 7)
Sales Comp Grid/ Appr of Trans ( 7/ 7)
Trending Via Demographics/ Appraising Land for
Development Potential ( 7/ 7)
NCPAC
2801- 3V Ward Boulevard
Wilson, NC 27893 ( 252) 291- 1200
Changes in the Appraisal Profession ( 4/ 4)
USPAP Instructor Recertification ( 7/ 7)
NCSU FORESTRY ED OUTREACH PROGRAM
Campus Box 8003
Raleigh, NC 27695 ( 919) 515- 3184
Accurate Forest Inventory ( 16/ 16)
Applied Intermediate GIS – Foresters ( 15/ 15)
Conservation Design: Greener Comm ( 14/ 7)
Dlntn of Pdmnt & Cstl Pln Jrsd ( 30/ 30)
Introduction to Applied GIS – Foresters ( 15/ 15)
Introduction to Applied GPS – Foresters ( 13/ 13)
NCSU SOIL SCIENCE DEPT
Campus Box 7619
Raleigh, NC 27695 ( 919) 513- 1678
Basics of On- Site Sewage ( 7/ 7)
Getting the Dirt on Soils ( 7/ 7)
On- Site System Tech Refresh ( 7/ 7)
Septic System Options for Diff ( 14/ 14)
Wastewater in the Environment ( 7/ 7)
Wells & Septic Systems ( 4/ 4)
REALETECH. COM
4819 Drummond Drive
Wilmington, NC 28409 ( 910) 352- 9693
Appraisers and Residential Reviews ( 7/ 7)
Fannie Mae Guidelines for Appraises ( 7/ 7)
Introduction to Environmental Risk Screenings ( 7/ 7)
National USPAP Update ( 7/ 7)
What the NC Appraisal Board Expects from You ( 4/ 4)
STACEY P. ANFINDSEN
1145- E Executive Circle
Cary, NC 27511 ( 919) 460- 7993
Appraisal Process and Val of Residential Prop ( 4/ 4)
National USPAP Update ( 7/ 7)
Smry Frm Rptng & Cmplnce W U ( 4/ 4)
SURRY CC
P. O. Box 304
Dobson, NC 27017 ( 910) 386- 8121
Fannie Mae Updated Prop & App ( 8/ 8)
Home Inspections & Common De ( 4/ 4)
Is the Comparable Comparable ( 8/ 8)
Mobile Mfg Homes & Types of M ( 4/ 4)
National USPAP Update ( 7/ 7)
Reviewing a Residential Appraisal ( 8/ 8)
Testing Highest & Best Use ( 8/ 8)
T H HUNTER & ASSOCIATES, INC.
1908 Sterling Road
Charlotte, NC 28209 ( 704) 372- 5855
Appraiser as an Expert Witness ( 7/ 7)
Intro to Res RE Investment ( 7/ 7)
Land, Res & Com Investment St ( 7/ 7)
Understanding Appraiser Liability ( 7/ 7)
TOM DANIEL SCHOOL OF RE
2932 Breezewood Avenue, Suite 110
Fayetteville, NC 28303 ( 800) 865- 8301
Property Disclosure: Reducing Risks ( 4/ 4)
TRIANGLE APPRAISAL & REAL
ESTATE SCHOOL
2801- 3V Ward Boulevard
Wilson, NC 27693 ( 252) 291- 1200
or ( 919) 971- 1887
Manufactured Home Construction ( 7/ 7)
National USPAP Update ( 7/ 7)
New FNMA Forms ( 7/ 7)
North Carolina Rules ( 7/ 7)
WENDELL HAHN & ASSOCIATES
P. O. Box 245
Columbia, SC 29250 ( 803) 779- 4721
Appraisal Update ( 7/ 7)
FHA Guidelines 2001 ( 7/ 7)
National USPAP Update ( 7/ 7)
Property Inspection for the App ( 7/ 7)
The Modern Appraisal Office – Part I ( 7/ 7)
The Modern Appraisal Office – Part II ( 7/ 7)
Tools or Toys – Technology For ( 7/ 7)
WESTERN PIEDMOND COMMUNITY COLLEGE
1001 Burkemont Avenue
Morganton, NC 28655 ( 828) 438- 6104
Appraising Manufactured, Modular & Mobile ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Maximizing Value ( 4/ 4)
Manufactured, Modular & Mobile ( 7/ 7)
National USPAP Update Course ( 7/ 7)
Pricing Complex Properties ( 4/ 4)
USPAP & NC Rules and Regulations for App ( 15/ 15)
WORLD SAVINGS
4101 Wiseman Boulevard
San Antonio, TX 78251 ( 210) 543- 5464
Appraisal Review 2 ( 8/ 8)
Appraising in a Changing Market ( 4/ 4)
National USPAP Update ( 7/ 7)
9
Approved Continuing Education Courses
10
Appraisers obtain comparable sales
information from listing services, tax
records, real estate agents and others in
performing appraisals. For the most
part, that information is correct and reli-able.
Sometimes, however, the informa-tion
is incorrect and relying upon it will
result in a misleading appraisal.
USPAP Standards Rule 1- 4 ( a)
requires that appraisers “ collect, verify,
and analyze such comparable sales data
as are available to indicate a value con-clusion.”
This is a three- step process.
First, you obtain the information from
your data source. Then you are
required to verify the information from
another source. Finally, you analyze all
the information you received.
For example, if you obtain compa-rable
sales information form MLS, you
then verify the information by calling
the listing or sales agent, the tax office,
or another source. If there is any dis-crepancy
between these two sources,
you must continue to research the sale
until you are confident that the informa-tion
you will use in your analysis is cor-rect.
This is especially important if you
receive verbal information, especially
from a homeowner.
You should also be careful to cor-rectly
identify both your data source
and verification source, and to keep in
your workfile a copy of the information
relied upon for the appraisal. For exam-ple,
if you use listing service data as
your data source and tax records as
your verification source, you should
have a copy of the listing service sheet
and tax record in your file. Sometimes
you may receive information orally,
such as from the listing broker over the
telephone. You should make a note for
the file of your conversation, including
the name and telephone number of the
source of information and the date, as
well as a summary of the information
received.
Verifying information is even more
important when you are performing an
appraisal outside your geographic area.
It is difficult to know who will give reli-able
data and who will not. Listing serv-ices
may use different ways to report
items such as square footage. Lack of
knowledge about a particular market
area does not relieve the appraiser of
responsibility for the misinformation in
the report, since the USPAP Com-petency
Provision makes it clear that
appraisers in an unfamiliar location
must spend sufficient time to under-stand
the nuances of the local market.
Verification of comparable sales
information for manufactured housing is
especially important. You must make
sure that the sale is not a land home
package, since a land home package has
not been exposed to the market and is
not an appropriate comparable. If you
obtain a HUD settlement on the sale of a
manufactured home, you should always
check public records such as the deed
office. If the tax stamps indicate a much
lower sales price than that on the HUD
statement, it is likely that the sale was
for the land only, and you are dealing
with a land home package and you can-not
use the sale. When you find a man-ufactured
home sale in a listing service,
you still must verify that it was not a
land home package. In addition, since
there are often financing considerations
and incentives involved in the sale of
manufactured homes, you must analyze
the data very carefully to make sure to
take these into account.
The question is often raised as to
whether it is ever appropriate to use a
stick- built home as a comparison sale
for a manufactured home. Generally
speaking, it usually is not appropriate to
do so. There may be occasions, howev-er,
where there are no sales that can
legitimately be used, and stick built
homes that are similar to the subject are
all that are available. If such sales are
used, adjustments should be made for
all appropriate factors, especially quali-ty
of construction. The appraiser must
note that the comparison sales are stick
built and must explain why they were
chosen as comps for a manufactured
home.
USPAP requires appraisers to main-tain
a copy of the workfile for every
appraisal assignment for at least five
years after preparation or two years after
court testimony, whichever period
expires last, thus it is important to keep
copies of all information and verification
in the file. Remember, the appraiser and
anyone else signing the report take full
responsibility for the data in the report,
and if the information source provides
inaccurate data, that fact does not ab-solve
the appraiser of responsibility.
Verify Your Comparable Sales Information!
Continuing Education
REMINDER
Appraisers and trainees must have
28 hours of continuing education credit
in order to renew their licenses this year,
including the 7- hour National USPAP
Update course.
If you took the 15- hour National
USPAP course between July 1, 2003
and December 31, 2004, the 15- hour
class will count towards the 7- hour
USPAP class requirement. If you take
the 15- hour class on or after January
1, 2005, you may still receive continu-ing
education credit, but you will still
have to take the 7- hour National
USPAP Update course in order to
renew your registration, license or
certificate.
Appraisal Board rules allow you to
take up to 14 hours of the 28- hour
requirement as on- line courses. You
will not get continuing education cred-it
for any on- line courses that exceed
14 hours.
No continuing education credit will be
carried over from the 2003- 2005 edu-cation
cycle into the 2005- 2007 cycle.
11
Ronald Best ( Cornelius)— By consent,
the Board suspended Mr. Best’s general cer-tification
for a period of six months. The
Board ordered Mr. Best to take a sales com-parison
course, and a course in appraiser lia-bility
or NC Board laws and rules by May 1,
2005. If he completes the courses by that
date, the suspension will be inactive. Mr.
Best also agrees that he will no longer super-vise
any trainees. The Board found that a
trainee working under the supervision of Mr.
Best appraised a manufactured home locat-ed
in Shelby, NC in November 2003, finding
an appraised value of $ 90,000. The trainee
did not sign the report, and Mr. Best signed
the report on the left side. He then checked
the “ Did not inspect” box on the right side.
Respondent noted in an addendum that the
trainee had provided significant professional
assistance, including inspecting and measur-ing
the subject property. The appraisal
report stated that subject was on a paved
road, and the photograph of the street in the
report shows a paved road with markings.
The subject is actually at the end of a long
unpaved, fair to poorly maintained gravel
road. The MLS sheet in the work file states
that the subject road is gravel. The sales
prices of the first and second comparable
sales could not be verified in the public
records. Mr. Best stated that there had been
no prior sales of his third comparable sale
that took place within one year of the
appraisal, but there had in fact been one sale
within that time period. The trainee
obtained his comparable sales information
from MLS but did not verify the data. There
were limited sales of homes in the subject
neighborhood that were listed on the local
MLS.
Dewayne Boyd ( Wake Forest)— By
consent, the Board suspended Mr. Boyd’s
residential certification for a period of 18
months effective November 1, 2004. Before
Mr. Boyd can renew his certification, he
must complete all required continuing edu-cation,
and must successfully complete a 7-
hour sales comparison class and a course in
appraiser liability. The Board found that Mr.
Boyd completed an appraisal on two prop-erties
located in Zebulon, NC in September
2002, indicating final values of $ 101,000 and
$ 86,000. A local realtor with knowledge of
the historical and current local real estate
market estimated that the property would
sell for no more than $ 80,000 and that the
other property would sell for no more than
$ 50,000. Mr. Boyd selected comparable sales
for his appraisals of both properties that
were superior in location, design and appeal
when compared to the subject properties.
The subject neighborhoods included a mix-ture
of single- family and 2- 4 family homes.
One of the subject properties had double-wide
and singlewide homes in the neighbor-hood.
None of those characteristics were
mentioned in Mr. Boyd’s appraisal reports.
Michael Casey ( Raleigh)— By con-sent,
the Board suspended Mr. Casey’s resi-dential
license for a period of thirty days,
beginning November 2004. Mr. Casey also
must successfully complete a course in
property inspection by December 31, 2004. If
he fails to do so, he will receive an addition-al
one- month suspension. The Board found
that Mr. Casey appraised a property located
in Raleigh, NC in May 2003, finding an
appraised value of $ 850,000. He reported
that the house contained 5,239, when it actu-ally
contained 3989 square feet. Mr. Casey
admits that he added 1,250 square feet of
unfinished second level area to the heated
square footage by mistake. This error was
caused by incorrectly inputting the 1,250
square foot unfinished attic information into
his software program. The value for the sub-ject
property would have been lower based
on the correct square footage of 3,989.
Tammy Childers ( Kings Mountain)—
By consent, the Board suspended Ms.
Childers’ trainee registration for a period of
one year. The first month of the suspension
will become active on September 1, 2004.
The remaining months are stayed until
December 1, 2004. Ms. Childers also agrees
to take two courses approved by the
Appraisal Board; a sales comparison course
and the 15- hour national USPAP course.
These courses must be completed by
December 1, 2004, or the remainder of the
suspension will become active. The Board
found that Ms. Childers, while working
under the supervision of a state- licensed
appraiser, appraised a 2120 square foot
home located in Monroe, NC in December
2003, finding an appraised value of $ 230,000.
Sales in the subject subdivision were all
smaller than the subject property, ranging
from 1143 to 1804 square feet, so Ms. Childers
chose sales from other subdivisions located
near the subject subdivision. Those sales
were all of similar size, and adjustments
were made for differences in age. The sales
were located in neighborhoods that were
superior to the subject neighborhood in
maintenance, appeal and quality, yet Ms.
Childers made no adjustments for those fac-tors.
The unadjusted sales prices of the com-parable
sales were $ 231,000, $ 235,000 and
$ 252,000. The “ customer estimated value”
on the appraisal order form was $ 220,000.
The appraisal was done for refinancing pur-poses,
but the loan did not close.
Corey Clark ( Charlotte)— By consent,
the Board suspended Mr. Clark’s trainee reg-istration
for a period of six months. The sus-pension
is stayed until November 1, 2004.
Mr. Clark must take R- 3 and a 14- hour course
in standards ( USPAP) by November 1, 2004.
Since he took the courses, the suspension is
inactive. The Board found that Mr. Clark,
while working under the supervision of a
state licensed appraiser, appraised a home
located in Kannapolis, NC in November
2001, finding an appraised value of $ 100,000.
The subject property is a 36- year- old 920
square foot ranch. Although Mr. Clark
described the house as of average quality
and condition, he used cost figures for a
good quality home. He gave the house an
effective age of 10 years. There was no men-tion
in the appraisal report of any upgrades
or renovations. Mr. Clark stated that the con-dition
of the comparable sales was also aver-age,
even though they were either new or
one- year old, and he made no adjustments
for condition. All of the comparable sales in
the report were either new or one year old,
and Mr. Clark used an across the board
adjustment of minus $ 8,500 for age. There
were a total of 95 sales in the neighborhood
ranging in value from $ 22,000 to $ 127,500. Of
these sales, 20 were built between 1950 and
1980 which would have been within 15- years
on either side of the time the subject was
constructed. Those sales ranged predomi-nantly
from $ 70,000 to $ 85,000.
Robert C. Cox ( Morganton)—
Following a hearing, the Board revoked Mr.
Cox’s residential license. The Board found
that an appraiser previously employed by
Mr. Cox filed a complaint with the Board
alleging irregularities in the appraisal assign-ments
and reports she prepared while a
trainee in Respondent’s employment. She
further alleged that Respondent did not ade-quately
supervise her work and that he
made false statements on appraisal reports.
Although Mr. Cox sent in a response to the
complaint, he failed or refused to send in
Disciplinary Actions
The following is a summary of recent disciplinary actions taken by the Appraisal Board. This is only a summary; for brevity, some of the facts and conclu-sions
may have not been included. Because these are summaries only, and because each case is unique, these summaries should not be relied on as prece-dent
as to how similar cases may be handled.
12
thirteen appraisal reports after numerous
requests by Board staff that he do so, a vio-lation
of state law and Appraisal Board rules.
Arthur Dec ( Raleigh)— By consent, the
Board issued a reprimand to Mr. Dec. He
must also successfully complete a sales com-parison
course by December 1, 2004, or the
reprimand will be vacated and a one- month
suspension will be imposed as of that date.
The Board found that Mr. Dec appraised a
home located in Durham, NC in October
2003, finding an appraised value of $ 724,000.
The subject property is located on a gravel
road in a rural area. The comparable sales
are located on paved streets in subdivisions
that appear to be superior. Comparable 3 is
located on the fairway of a golf course. Mr.
Dec made no adjustments for location as he
believed the location adjustments were off-set
by the subject’s 2.06- acre site versus the
comparable sites of .7 to 1.18 acre sites.
There were other differences between the
subject and the comparable sales that Mr.
Dec offset in his appraisal process, but he
failed to mention in this appraisal report. He
also inadvertently left out 1294 square feet of
unfinished basement area on one of his com-parable
sales.
Margaret English ( Gold Hill)— By
consent, the Board accepted the voluntary
surrender of Ms. English’s residential
certification.
Norma Harless ( Lenoir)— By consent,
the Board suspended Ms. Harless’ residen-tial
license for a period of six months. She
must take a course in sales comparison
before her license will be returned to her.
The Board found that Ms. Harless performed
three appraisals of a property located in
Granite Falls, NC. The first appraisal was per-formed
in March 2002 and indicated a value
of $ 198,100. The second appraisal was per-formed
in August 2002 and indicated a value
of $ 212,000. The third appraisal report was
performed in October 2002 and indicated a
value of $ 239,000. The first appraisal report
correctly indicated that the subject had an
addition that was incomplete at the time of
the inspection, but Ms. Harless valued the
property as though the addition were com-pleted
even though she stated that the
appraisal was done “ as is”. The second two
appraisal reports stated that the addition
was complete, although it was not. She again
valued the property as though the addition
were complete, but did both those appraisal
reports “ as is”. Ms. Harless stated that the
actual age of the property was 28 years,
when in fact the subject dwelling was built in
1945, indicating an actual age of 57 years. She
averaged the actual age of the dwelling and
the age of the new addition to indicate her
actual age, but she did not provide an expla-nation
in the report. The sales utilized in the
appraisal reports were superior to the sub-ject,
and there were other sales available
that would have indicated a lower value for
the subject.
Nathan Henderson ( Wilmington)—
Following a hearing, the Board revoked Mr.
Henderson’s trainee registration. The Board
found that in August 2001, Mr. Henderson
filed an application to become a state- regis-tered
trainee. On his application, Mr.
Henderson reported that in September 1994,
he had been found guilty of possession of
drug paraphernalia and possession of mari-juana.
The Appraisal Board deferred his
application, and a hearing was held so that
Mr. Henderson could demonstrate that he
possessed the requisite trustworthiness,
honesty and integrity to engage in the busi-ness
of a real estate appraiser trainee. After
that hearing, the Appraisal Board granted his
application, and his registration as a trainee
was issued in December 2001. In June 2004,
Mr. Henderson notified the Board that he
had been charged with growing marijuana at
his personal residence. He admitted that he
was convicted in June 2004 of manufacturing
marijuana, a Schedule VI controlled sub-stance,
which is a felony conviction, and that
at the time of the hearing, he was on proba-tion
for that offense. He testified that he grew
the marijuana for his personal use as a way
to control pain. The pain was the result of a
1998 incident where his arm was severely
injured. Mr. Henderson presented no medi-cal
testimony regarding his injury or treat-ment.
He continued to use marijuana after
the Appraisal Board granted him a trainee
registration in 2001. His use of marijuana dur-ing
this time may have affected his perfor-mance
in the real estate appraisal business.
Nadine Hicks ( Marshville)— By con-sent,
the Board issued a reprimand to Ms.
Hicks. She must also complete a course in
appraiser liability by December 31, 2004 or
the reprimand will be vacated and a one-month
suspension will be activated on that
date. The Board found that Ms. Hicks
appraised a home located in Charlotte, NC in
September 2001, finding an appraised value
of $ 68,000. On the effective date of the
appraisal, the owner of the subject property
was Richard Strikeleather. Although Re-spondent
had a tax card in her work file indi-cating
that Mr. Strikeleather was the owner,
she listed SS & Associates as the owner in
the appraisal report as she also had an
unrecorded deed that showed the transac-tion
date as August 2000. In the appraisal
report, Respondent indicated that the data
sources for all her comparable sales were
“ Drive by/ MLS Public Records”, when none
of her comparable sales were listed on MLS.
Respondent obtained her comparable data
solely from the local GIS service, which did
not list details of the condition of those sales
and also did not list any sales concessions.
On the appraisal report, she stated that all
comparable sales were in average condition
and that there were no seller concessions,
but there was no evidence in her work file to
support these statements. There were limit-ed
sales of homes in the subject neighbor-hood
that were listed on the local MLS. Sales
that were listed indicate a lower value for the
subject property.
Benny Hilliard ( Winston- Salem)— By
consent, the Board issued a reprimand to
Mr. Hilliard. Mr. Hilliard must also success-fully
complete a course in property inspec-tion,
by September 30, 2004 or the repri-mand
will be vacated and one- month sus-pension
will be imposed as of that date. The
Board found that Mr. Hilliard appraised a
home located in Winston- Salem, North
Carolina on November 15, 2003, finding an
appraised value of $ 149,000. The subject is a
single- family residential dwelling with asso-ciated
site improvements located on a 1.39-
acre site. A private school surrounds the
subject site with the school building and
parking lot to the rear or west of the subject.
The entrance driveway for the school
bounds the north side of the subject site and
the exit driveway for the school bounds the
south side of the subject site. The school and
parking lot lie below the subject site with a
well- landscaped embankment that slopes
down from the subject site to the parking lot.
Additionally, there is a high- tension power
line easement and substation located adja-cent
to the north side of the school and with-in
view of the subject dwelling. There was no
mention of the school or the power lines
within the report.
Nathaniel Holloway ( Durham)— By
consent, the Board suspended Mr.
Holloway’s general certification for a period
of six months. The suspension is stayed until
March 1, 2005. If Mr. Holloway completes a
course in sales comparison and an apprais-er
liability course by that date, the suspen-sion
will be inactive. The Board found that
Mr. Holloway completed an appraisal report
on a property located at 915 Chalice Drive,
Durham, North Carolina, indicating a final
value of $ 200,000 on September 8, 2001. Mr.
Disciplinary Actions
Holloway stated in the appraisal report that
the subject property had an above grade liv-ing
area of 2417 square feet. Of that total, 354
square feet was a den that was not heated
and cooled like the remaining area of the
subject property, and thus should not have
been included in gross living area. The sub-ject
property is a split- level home located in
the Archer Woods subdivision. Mr.
Holloway used three comparable sales in his
report. Two of the sales were in Westwood
Estates, which is a somewhat superior sec-tion
of a subdivision connected to the sub-ject
subdivision. One of those sales was a
two story and one was a one and a half story,
yet Mr. Holloway made no adjustments for
design or location. The third sale was from
the subject subdivision. By utilizing the
incorrect square footage for the subject and
by failing to make appropriate adjustments
for differences in design and location in the
appraisal report, the final value for the sub-ject
property was higher than it should have
been.
Sandra Keith ( Winston- Salem)— By
consent, the Board suspended Ms. Keith’s
residential certification for a period of six
months. The suspension is stayed until
March 1, 2005. If Ms. Keith takes a sales com-parison
course and a course in appraiser lia-bility,
the suspension shall be inactive. The
Board found that Ms. Keith and another
appraiser performed an appraisal on a prop-erty
located at 2668 S. Stratford Road,
Winston- Salem, NC, indicating a final value
of $ 251,000 as of April 8, 2002. The appraisal
was made “ as is”. The subject property was
a vacant two- story building located on a .52
acre lot that was zoned LO- S ( limited office –
special use). It was located on a major four
lane road, and was surrounded by proper-ties
which were either vacant or were being
used for non- residential purposes. Ms. Keith
was aware that the borrower owned several
residential rental properties, and believed
that she was planning to make the subject
property her home. She appraised the prop-erty
as residential, indicating in the appraisal
report that the “ highest and best use” was
the present use as a single- family residence.
By appraising the property as residential,
the borrower was able to obtain financing at
more favorable rates. The subject had been
used as an office for at least two years prior
to the appraisal report and was being used
as a mortgage company office at the time of
the Board’s investigation. The highest and
best use of the property should have been
indicated as commercial. Ms. Keith used
three single- family residences as compara-ble
sales. Even if she had appraised the
property to its correct highest and best use,
the value would not have been significantly
different.
B. Carter Kennemur ( Zebulon)— By
consent, the Board suspended Mr.
Kennemur’s general certification for a period
of one year effective September 15, 2004, the
first month of which shall be active. In addi-tion,
Mr. Kennemur agrees that he will per-form
no more appraisals for condemnation
or eminent domain proceedings until he
have successfully completed 30 hours of
education regarding condemnation apprais-ing.
The Board found that Mr. Kennemur
and another appraiser appraised a property
located in Navassa, NC in September 2002,
with an effective date of April 2000. The sub-ject
property consists of approximately 196
acres of undeveloped, heavily wooded land.
Brunswick County had acquired 35 acres of
the subject property in order to expand a
wastewater treatment plant. Mr. Kennemur
valued the subject property before the tak-ing
at $ 3,472,000. He valued 163.8 acres of
upland at $ 21,000 per acre and 32 acres of
wetland at $ 1,000 per acre. He valued the
160.748 acres that remained after the taking
at $ 2,060,000, a difference of $ 1,412,000 for the
value of the 35 acres taken. He used four
sales in their report. Three of the four sales
were developed lots in an industrial park,
complete with access streets and utility serv-ice.
These sales ranged from $ 20,530 to
$ 29,596 per acre, and ranged from 6.69 to
12.81 acres. These sales were not truly com-parable
to the subject property, and Mr.
Kennemur made inadequate adjustments to
these sales. The other sale was a lot near the
subject that contained 60.1369 acres and that
sold for $ 1,300,000. Although that site was
improved with an old fertilizer plant, since
the lot was already cleared it would have
taken substantially less cost to develop it as
opposed to the subject site, which was heav-ily
wooded. Forty acres were usable upland
and the remaining were wetlands. Mr.
Kennemur stated in the appraisal report that
the price per acre was $ 32,500 based on 40
acres of upland, and $ 21,617 per acre straight
through; however, he used a figure of $ 32,500
per acre in the appraisal. This sale had sig-nificant
frontage along the Brunswick River
and was purchased by a boat manufacturing
company specifically because it had river
frontage south of a railroad bridge tender.
Although a large portion of the sales price
was paid by the county, Mr. Kennemur did
not note this fact in the appraisal report or
make any adjustments for it. There were larg-er
acreage sales available that were located
further in distance than the comparables
used, but were much more similar than the
comparables used. These sales ranged
$ 2,333 to $ 8,405 per acre. In the after condi-tion,
Mr. Kennemur valued the upland at
$ 15,750 per acre, and the wetlands at $ 1000
per acre. He used the same four comparable
sales as in the before condition, then stated
the property was diminished by 25% by the
taking. There was insufficient information
contained in the work file to support this
adjustment. The appraisal report did not
comply with USPAP Standards Rule 2- 2( c) in
that the report did not disclose the scope of
work, nor did it describe the appraisal pro-cedures
followed in the valuation of the
property in the after condition.
John Kennemur ( Zebulon)— By con-sent,
the Board suspended Mr. Kennemur’s
residential certification for a period of one-year
effective September 15, 2004, the first
month of which shall be active. In addition,
Mr. Kennemur agrees that he will perform
no more appraisals for condemnation or
eminent domain proceedings until he have
successfully completed 30 hours of educa-tion
regarding condemnation appraising.
The Board found that Mr. Kennemur and
another appraiser appraised a property
located in Navassa, NC in September 2002,
with an effective date of April 2000. The sub-ject
property consists of approximately 196
acres of undeveloped, heavily wooded land.
Brunswick County had acquired 35 acres of
the subject property in order to expand a
wastewater treatment plant. Mr. Kennemur
valued the subject property before the tak-ing
at $ 3,472,000. He valued 163.8 acres of
upland at $ 21,000 per acre and 32 acres of
wetland at $ 1,000 per acre. He valued the
160.748 acres that remained after the taking
at $ 2,060,000, a difference of $ 1,412,000 for the
value of the 35 acres taken. He used four
sales in their report. Three of the four sales
were developed lots in an industrial park,
complete with access streets and utility serv-ice.
These sales ranged from $ 20,530 to
$ 29,596 per acre, and ranged from 6.69 to
12.81 acres. These sales were not truly com-parable
to the subject property, and Mr.
Kennemur made inadequate adjustments to
these sales. The other sale was a lot near the
subject that contained 60.1369 acres and that
sold for $ 1,300,000. Although that site was
improved with an old fertilizer plant, since
the lot was already cleared it would have
taken substantially less cost to develop it as
opposed to the subject site, which was heav-ily
wooded. Forty acres were usable upland
and the remaining were wetlands. Mr.
Kennemur stated in the appraisal report that
the price per acre was $ 32,500 based on 40
13
Disciplinary Actions
acres of upland, and $ 21,617 per acre straight
through; however, he used a figure of $ 32,500
per acre in the appraisal. This sale had sig-nificant
frontage along the Brunswick River
and was purchased by a boat manufacturing
company specifically because it had river
frontage south of a railroad bridge tender.
Although a large portion of the sales price
was paid by the county, Mr. Kennemur did
not note this fact in the appraisal report or
make any adjustments for it. There were larg-er
acreage sales available that were located
further in distance than the comparables
used, but were much more similar than the
comparables used. These sales ranged
$ 2,333 to $ 8,405 per acre. In the after condi-tion,
Mr. Kennemur valued the upland at
$ 15,750 per acre, and the wetlands at $ 1000
per acre. He used the same four comparable
sales as in the before condition, then stated
the property was diminished by 25% by the
taking. There was insufficient information
contained in the work file to support this
adjustment. The appraisal report did not
comply with USPAP Standards Rule 2- 2( c) in
that the report did not disclose the scope of
work, nor did it describe the appraisal pro-cedures
followed in the valuation of the
property in the after condition.
Karen Faith Mims ( Four Oaks)— By
consent, the Board accepted the voluntary
surrender of Ms. Mim’s residential
certification.
Dexter G. Moore ( Grifton)— By con-sent,
the Board suspended Mr. Moore’s gen-eral
certification for a period of six months.
Mr. Moore also agreed to successfully com-plete
a course in condemnation appraising
by May 1, 2005. If he completes the course
by that date, only three months of the sus-pension
shall be active. The Board found
that Mr. Moore performed an appraisal of 47
acres of land located in Rocky Mount, North
Carolina in October 2002, with an effective
date of January 4, 2001. His client was the
owner of property, which was subject to con-demnation.
The condemnation involved the
taking of about 1.5 acres of the land for a
sewer pump station and a sewer easement.
Part of the subject was in a 100- year flood
plain and the other part was in a 500- year
floodplain. The 1.5 acres taken during the
condemnation was from the center and high-est
part of the property. The entire property
was flooded during Hurricane Floyd in
September 1999, which was over a year
before the taking. Mr. Moore stated that the
land was worth $ 470,000 before the taking
and $ 27,000 after the taking. He used 3 sales
in his appraisal to value the property in the
before condition. These sales were superior
to the subject in location and drainage, yet
Mr. Moore did not make adjustments for
drainage. Mr. Moore stated that in the after
condition, the property was worth only $ 600
per acre. Although he had supporting infor-mation
in his file from several local develop-ers
concerning the difficulty of developing
the property in the after condition, he had
no support in the appraisal report for this
opinion of value.
E. Lindsay Morris ( Troy)— By consent,
the Board suspended Mr. Morris’s residen-tial
certification for three months effective
October 1, 2004. The Board found that Mr.
Morris appraised the subject property locat-ed
in Albemarle, NC in December 1998, indi-cating
a final value of $ 66,000. Although
there was a buyer and seller name listed on
the appraisal report, Mr. Ramsey failed to
identify a sales price, and failed to address
the sales contract. The subject property
transferred two times on December 22, 1998.
It first sold for $ 38,000, and then immediately
sold for $ 66,000. On his appraisal report, Mr.
Morris failed to identify the client. He also
failed to state the type of reporting format
used for the appraisal report. In addition, his
work file was not complete in that it did not
contain copies of his limiting conditions and
his certification.
Gina Morris ( Salisbury)— By consent,
the Board issued a reprimand to Ms. Morris.
Ms. Morris agrees to take a sales comparison
course and a course in appraiser liability by
April 30, 2005. If she does not take these
courses before this date, the reprimand will
be vacated and a two- month active suspen-sion
will be activated. The Board found that
Ms. Morris, working under the supervision
of a state- certified residential appraiser,
appraised a home located in Charlotte, NC in
June 2002, finding an appraised value of
$ 105,000. The subject is a mostly brick 1126
square foot home, with three bedrooms and
two bathrooms. The sales used in the ap-praisal
report were all of similar size ( 1001 to
1048 square feet) and age ( all 53 years old),
and were located within .5 miles of the sub-ject.
They were located in a neighborhood
that was superior to the subject neighbor-hood
in maintenance and appeal, yet Ms.
Morris made no adjustments for location.
The sales used in the report were $ 118,500,
$ 104,900 and $ 125,000. The “ customer esti-mated
value” on the appraisal order form
was $ 105,000. The property was foreclosed
in June 2003 for $ 50,000, sold by the lending
institution for $ 48,000 in November 2003 and
sold again in December 2003 for $ 84,000.
John Norwood ( Belmont)— By con-sent,
the Board suspended Mr. Norwood’s
residential certification for a period of six
months effective November 1, 2004. If Mr.
Norwood takes a class in sales comparison
course and the 15- hour National USPAP
course, only the first month of the suspen-sion
shall be active. The Board found that
Mr. Norwood appraised a home located in
Rutherfordton, NC in February 2001, finding
an appraised value of $ 74,000. The subject is
a 1498 square foot ranch style home, with
three bedrooms and one bathroom. It was
63 years old at the time of the appraisal, and
in average condition. The subject street con-tains
manufactured homes, both single and
doublewide manufactured homes, block
homes, and deteriorating buildings, none of
which were mentioned in the appraisal
report. Mr. Norwood chose sales from supe-rior
areas within a mile of the subject neigh-borhood,
where the homes were of similar
age, but the homes in those areas were well
maintained and frequently updated. The
sales used in the appraisal report were supe-rior
in quality to the subject, having improve-ments
such as 10' ceilings, fresh interior
paint, pine floors, new carpet and vinyl, etc.,
yet Mr. Norwood made an adjustment for
condition to only one of his sales, and that
was for $ 1000. He made no adjustment for
the fact that his comparable sales were locat-ed
in superior neighborhoods.
Chappell V. “ Dick” Parker ( Smith-field)—
Following a hearing, the Board
revoked Mr. Parker’s general certification.
The Board found that Mr. Parker appraised a
property located in Wayne County in March
2003. His final estimate of value for the prop-erty
was $ 560,000. The subject property was
a new 3,855 square foot custom built home
situated on a rural lot. Mr. Parker’s work file
contained a detailed list of the specifications
for construction for the subject. The original
total cost to build was $ 398,312; however, the
cost figure on the subject increased after all
change orders and adjustments were made.
Mr. Parker stated in the appraisal report that
the gross living area of Comparable Sale No.
1 was 4,361 square feet, when it actually con-tained
5,061 square feet. He reported that
Comparable Sale No. 2 had four baths and a
double garage, when it actually had four and
a half baths and a three- car garage. He
reported that his third sale sold on April 20,
2002, when it actually sold on April 20, 2000.
Mr. Parker had MLS sheets in his work file
that indicated the correct information for his
three comparable sales, but he reported
incorrect information in his appraisal report
without any explanation. Mr. Parker’s three
14
Disciplinary Actions
comparable sales were located in a private
country club known as Walnut Creek, which
has a golf club, swimming pool, clubhouse
and various other amenities. Lot values for
properties in Walnut Creek run from about
$ 40,000 for interior lots to $ 150,000 for lots on
the golf course or with a lake view. Two of
his three comparable sales were located on
the golf course, and one was located on the
lake; their lot values all exceeded $ 125,000.
Mr. Parker stated in the Cost Approach in his
appraisal report that the subject site was
worth $ 25,000. Despite the significant differ-ences
in lot values between the subject and
the comparable sales, Mr. Parker made no
adjustment for site for his first two compara-ble
sales, and made a $ 12,500 negative
adjustment to his third sale. The subject was
located on a road in a rural area. It was not
in a subdivision and had no subdivision
amenities or view, yet Mr. Parker made no
adjustments for differences in location for
the subject property. His comparable sales
sold in December 1999, April 2000 and
October 2001, while the appraisal was per-formed
in March 2003. Mr. Parker chose the
three highest priced sales that had ever sold
in the county. Another appraiser performed
a review on Mr. Parker’s appraisal report in
April 2003. In his review, he used three sales
that were much more comparable to the
subject. Those sales ranged in price from
$ 283,000 to $ 347,460 and ranged from 3223
square feet to 3965 square feet. The oldest
sale he used was from June 2001. The
reviewer valued the property at around
$ 300,000. There were several other sales that
were more comparable to the subject prop-erty.
Those sales ranged in price from
$ 275,000 to $ 315,000 and ranged from 2950 to
4310 square feet. By using sales that were not
comparable to the subject property, and by
not making appropriate adjustments for the
differences, Mr. Parker inflated the value the
subject property. Mr. Parker had previously
been disciplined by the Appraisal Board in
two separate consent orders. In the first con-sent
order, his certification was actively sus-pended
for three months, and in the second,
his certification was actively suspended for
two months.
John Parrish ( Concord)— By consent,
the Board suspended Mr. Parrish’s residen-tial
certification for a period of two months.
The suspension is stayed until April 30, 2005.
If Mr. Parrish takes a sales comparison
course and the course in the role of a super-visor
by that date, the suspension will be
inactive. Mr. Parrish also agrees that he will
not act as a supervisor for either of his
trainees until he has completed the course
in the role of a supervisor. The Board found
that Mr. Parrish and a trainee appraised a
home located in Charlotte, NC in June 2002,
finding an appraised value of $ 105,000. The
subject is a mostly brick 1126 square foot
home, with three bedrooms and two bath-rooms.
The sales used by in the appraisal
report were all of similar size ( 1001 to 1048
square feet) and age ( all 53 years old), and
were located within .5 miles of the subject.
They were located in a neighborhood that
was superior to the subject neighborhood in
maintenance and appeal, yet Mr. Parrish
made no adjustments for location. The sales
used in the report were $ 118,500, $ 104,900
and $ 125,000. The “ customer estimated
value” on the appraisal order form was
$ 105,000. The property was foreclosed in
June 2003 for $ 50,000, sold by the lending
institution for $ 48,000 in November 2003 and
sold again in December 2003 for $ 84,000.
Jack A. Ramsey, Jr. ( Mt. Ulla)— By
consent, the Board suspended Mr. Ramsey’s
residential certification for a period of three
months. If Mr. Ramsey takes a course in
manufactured housing and a course in
appraiser liability by December 1, 2004, the
suspension will be inactive. The Board
found that Mr. Ramsey appraised a home
located in Dallas, NC in August 2003, indicat-ing
a final value of $ 122,500. The subject was
a modular home, and the appraisal was
made “ as is.” The tax value on the property
at the time of appraisal was $ 143,690. There
were no sales in the immediate area that
could be used as comparable sales, and Mr.
Ramsey did discuss in the report that the
manufactured/ modular home resale market
in the subject areas was minimal. Mr.
Ramsey made a minus $ 19,100 adjustment
for Sale No. 1 having superior quality of con-struction.
He made positive adjustments of
$ 8,300 for Sale No. 2 and $ 7,750 for Sale No. 3,
due to both having inferior quality of con-struction
compared to the subject. There
was no support in the appraisal report or
work file for these adjustments. Although
there was a buyer and seller name listed on
the appraisal report, Mr. Ramsey stated in
the report that there was no contract pend-ing
on the subject.
Leslie Robinson ( Kings Mountain)—
By consent, the Board suspended Ms.
Robinson’s residential license for a period of
one year. The first month of the suspension
will become active on September 1, 2004.
The remaining months are stayed until
December 1, 2004. Ms. Robinson also agrees
to take two courses approved by the Ap-praisal
Board; a sales comparison course
and the 15- hour national USPAP course.
These courses must be completed by
December 1, 2004, or the remainder of the
suspension will become active. The Board
found that a trainee working under the
supervision of Ms. Robinson appraised a
2120 square foot home located in Monroe,
NC in December 2003, finding an appraised
value of $ 230,000. Sales in the subject subdi-vision
were all smaller than the subject prop-erty,
ranging from 1143 to 1804 square feet, so
Ms. Robinson chose sales from other subdi-visions
located near the subject subdivision.
Those sales were all of similar size, and
adjustments were made for differences in
age. The sales were located in neighbor-hoods
that were superior to the subject
neighborhood in maintenance, appeal and
quality, yet Ms. Robinson made no adjust-ments
for those factors. The unadjusted
sales prices of the comparable sales were
$ 231,000, $ 235,000 and $ 252,000. The “ cus-tomer
estimated value” on the appraisal
order form was $ 220,000. The appraisal was
done for refinancing purposes, but the loan
did not close.
Richard Simmons ( Charlotte)— By
consent, the Board suspended Mr.
Simmons’ residential certification for a peri-od
of two ( 2) years with the first year being
active. The Board found that Mr. Simmons
Respondent appraised a property located in
Charlotte, NC in May 2002, finding an
appraised value of $ 255,000. The appraisal
report, dated May 24, 2002, was completed
for the sale of the property. The closing state-ment
indicated a contract price of $ 255,000.
Mr. Simmons appraised the subject property
again on January 9, 2003, indicating a final
value of $ 265,000. The appraisal report,
dated January 9, 2003, was completed for the
refinancing of the property. Sales in the sub-ject
neighborhood ranged from $ 153,000 to
$ 218,000. In the 2002 appraisal report, Mr.
Simmons adjusted approximately $ 22.50/
square foot for Gross Living Area. In the 2003
report, Mr. Simmons adjusted approximately
$ 15.00/ square foot. There was no explana-tion
as to why the adjusted value changed
by 33% in approximately 8 months. The pho-tographs
of the comparables in both of the
appraisal reports were not of the correct
properties.
Donald Spake ( Hickory)— By con-sent,
the Board issued Mr. Spake a repri-mand
and ordered him to take a course in
condemnation or eminent domain apprais-ing.
If he does not complete the course by
March 1, 2005, the reprimand will be vacated
and a one- month suspension will be activat-
15
Disciplinary Actions
16
NORTH CAROLINA
APPRAISAL BOARD
P. O. Box 20500
Raleigh, NC 27619- 0500
4,500 copies of this document were printed at a cost of $. 69 per copy.
PRESORTED STD
U. S. Postage
PAID
Permit No. 1978
RALEIGH, NC
ed. The Board found that Mr. Spake per-formed
an appraisal for condemnation pur-poses
of a property located in Gastonia, NC.
Mr. Spake estimated that the property mar-ket
value was $ 259,000 before the taking ( it
was a total take). The jury awarded $ 263,000
in damages to the property owner. The sub-ject
property consists of a half- acre site,
improved with a split- level style single- family
dwelling. On the effective date of the
appraisal the property was zoned O & I 1C.
He made a positive adjustment for costs to
convert the subject to an office, when he
should have made a negative adjustment for
those expenditures. Although Mr. Spake stat-ed
that there was a shortage of similar sales
within the city and that he therefore used
office sales from another area, there were
several sales of dwellings converted to com-mercial
use that were located closer to the
subject.
John Vestal ( Charlotte)— By consent,
the Board issued a reprimand to Mr. Vestal.
Mr. Vestal also agreed to successfully com-plete
a course in sales comparison by March
1, 2005. If he does not complete the course
by that date, the reprimand will be vacated
and a one- month suspension will be activat-ed.
The Board found that Mr. Vestal per-formed
an appraisal of a property located in
Charlotte, NC in August 22, 2001, finding an
estimated value of $ 110,000. He used three
comparable sales that were all located out-side
the subdivision. Those properties were
all newer than the subject, were superior in
quality to the subject and were in superior
neighborhoods, yet Mr. Vestal failed to make
adequate adjustments for those factors.
There was only one sale in the subject
subdivision that had sold within a year of
the Mr. Vestal’s appraisal. This sale was sig-nificantly
smaller than the subject and
would have required excessive adjustments.
Mr. Vestal should have mentioned the sale
in his report as it was within the subject
subdivision.
Samuel Walters ( Winston- Salem)—
By consent, the Board suspended Mr.
Walter’s residential certification for a period
of six months. The suspension is stayed until
March 1, 2005. If Mr. Walters takes a sales
comparison course and a course in apprais-er
liability, the suspension shall be inactive.
The Board found that Mr. Walters and
another appraiser performed an appraisal
on a property located at 2668 S. Stratford
Road, Winston- Salem, NC, indicating a final
value of $ 251,000 as of April 8, 2002. The
appraisal was made “ as is”. The subject
property was a vacant two- story building
located on a .52 acre lot that was zoned LO-S
( limited office – special use). It was located
on a major four lane road, and was sur-rounded
by properties which were either
vacant or were being used for non- residen-tial
purposes. Mr. Walters was aware that the
borrower owned several residential rental
properties, and believed that she was plan-ning
to make the subject property her home.
He appraised the property as residential,
indicating in the appraisal report that the
“ highest and best use” was the present use
as a single- family residence. By appraising
the property as residential, the borrower
was able to obtain financing at more favor-able
rates. The subject had been used as an
office for at least two years prior to the
appraisal report and was being used as a
mortgage company office at the time of the
Board’s investigation. The highest and best
use of the property should have been indi-cated
as commercial. Mr. Walters used three
single- family residences as comparable
sales. Even if he had appraised the property
to its correct highest and best use, the value
would not have been significantly different.
Michael Wright ( Concord)— By con-sent,
the Board issued a reprimand to Mr.
Wright. He must also successfully complete
a sales comparison course by April 1, 2005,
or the reprimand will be vacated and a one-month
suspension will be imposed as of that
date. The Board found that Mr. Wright per-formed
an appraisal in October 2000 of a
property located in Charlotte, NC, finding an
appraised value of $ 106,000. The appraisal
report incorrectly indicated that the subject
had two fireplaces when it only had one. Mr.
Wright adjusted the square footage differ-ences
for two of his comparable sales at $ 15
per square foot and at $ 20 per square foot for
one comparable sale, when the square
footage adjustment for all sales should have
been $ 20 per square foot. Mr. Wright stated
in the income approach section of the
appraisal report that the market rent for the
subject property would be $ 950 and the
appropriate gross rent multiplier is $ 110, but
he provided no support for those figures in
his report or within his work file. The final
indicated market value would have been
slightly lower if not for the errors in the
appraisal report.
Disciplinary Actions

1
Volume 15 January 2005 Number 1
There are several changes to USPAP
for 2005. The definition of APPRAISAL
REVIEW was changed to limit the defini-tion
only to the work of another appraiser
in appraisal, appraisal review or appraisal
consulting assignments. The definition of
CASH FLOW ANALYSIS and the comment
in the definition of REPORT were deleted.
The term “ purpose” was replaced
with the use of the terms type and defini-tion
of value, intended use or problem to
be solved. This is especially noted in Rules
1- 2 ( c) and 2- 2( a)( v), ( b)( v) and ( c)( v),
where a requirement has been added for
the appraiser to include the citation for the
source of the value definition used.
Rules 1- 3( b) has been amended to
remove the requirement in the develop-ment
of highest and best use that land
must always be valued as if vacant and
available for development. This does not
mean that appraisers do not have to devel-op
an opinion of the subject land. The
Appraisal Standards Board has stated that
this requirement is one of methodology,
which is covered by Rule 1- 1( a).
Rules 2- 1, 2- 2 and 3- 2 have been
amended to require clear and conspicuous
disclosure of extraordinary assumptions
and hypothetical conditions. The require-ment
that the appraiser indicate the
impact on value of an extraordinary
assumption or hypothetical condition has
been deleted.
Rule 2- 2 has been clarified regarding
reporting requirements for reconciliation.
Rule 2- 3, the appraiser’s certification,
has been amended to require that the cer-tification
state whether any one has pro-vided
significant real property appraisal
assistance. Formerly this section required
the appraiser to mention any person who
gave significant professional assistance.
In Standard 3, a clarification was
made that this standard applies only to the
work of another appraiser in an appraisal,
appraisal review or appraisal consulting
assignment. Previously, this standard
applied to another’s appraiser’s work.
Two Statements on Appraisal Stand-ards
were amended. Statement 6 was
changed to delete the requirement to
report exposure time in all assignments.
The appraiser is still required to develop
an estimate of exposure time in market
value assignments. Statement 7 was
changed to correctly address levels of reli-ability.
Previously this Statement indicated
that a Complete Appraisal had the highest
level of reliability, while Limited Ap-praisals
had varying levels of reliability.
This language has been eliminated.
Advisory Opinion 6 has been retired,
and changes were made to Advisory
Opinion 21 to clarify an appraiser’s obliga-tions
for complying with USPAP.
Finally, one potentially important
issue is noticed on the cover of the 2005
edition of USPAP. This edition is not limit-ed
to just the calendar year 2005. It is
entirely possible that either there will not
be a 2006 edition, or that the 2006 edition
will not become effective until some time
after January 1, 2006.
The 2005 edition of USPAP may be
viewed on the Appraisal Foundation’s
website at www. appraisalfoundation. org.
The Appraisal Board has worked
many years in anticipation of con-structing
or purchasing an office build-ing
as additional space is needed and
rents continue to increase. The Board
purchased a building site some two
years ago and began developing plans
for a new office building. An architect
was employed after receiving bids and
conducting interviews. Many hours
have been devoted to developing
plans for a building containing approx-imately
14,000 square feet of modern
design with size to meet our needs
now and in the future. Competitive
sealed bids were received and a con-tract
was recently negotiated and
signed to begin construction which is
anticipated to take one year. The loca-tion
of the new office is approximately
1.5 miles north of the existing office
directly on Six Forks Road in North
Raleigh. The Board and staff will be
able to better serve all licensees with
this new facility which is considered
financially feasible after analyzing
future space needs and rent rates in
the Raleigh area.
2005 Changes To USPAP
New Board Building BOARD NEWS
The Appraisereport will be published in January
and July each year with an expanded amount of in-formation
and all disciplinary actions of the Board. The
Board website at www. ncappraisalboard. org will be
updated and expanded to include any pertinent
monthly news and all disciplinary actions. These
changes are being made in an effort to improve com-munications
with licensees and to better utilize our
website. More information will be published as we
work to develop online renewals and the electronic
transmission of various forms.
New Employee
Christy Henson began employment in January as a part- time office assistant. Ms.
Henson has a BSBA degree from the University of Florida and an MBA degree from
Fuqua School of Business, Duke University. She will be working primarily with Legal
Counsel and the Deputy Director of Investigations. Ms. Henson is involved as a vol-unteer
in many organizations and she and her family make their home in Wake
Forest.
Reciprocity
North Carolina and Virginia signed a reciprocal licensing agreement allowing
appraisers from both states to obtain an appraisal license or certificate in the other
state in a streamlined manner. For a complete list of states North Carolina holds
reciprocal agreements with, please visit the Board’s website at: http:// ncappraisal-board.
org/ reciprocity/ default. htm
Note: Reciprocal agreements do not apply to trainees.
Top Trainee Problems
You became a trainee a few years ago, worked under the supervision of an apprais-er
and compiled the correct amount of appraisal experience. You send in your appli-cation
to upgrade your status, but then receive a letter from the Appraisal Board stat-ing
that your application is being returned because you do not have enough points
to qualify to upgrade. What happened?
In order to receive experience credit, the appraisals you have done must have been
made in compliance with USPAP and applicable state laws and rules. Unfortunately,
in too many instances trainees have not made sure that their supervisor has com-plied
with Board rules when performing supervision. What can a trainee do to make
sure the appraisals will be counted?
1. Make sure that your supervisor has sent in the supervisor declaration form to
the Appraisal Board before you begin work with that supervisor. Although
you can have more than one supervisor, each supervisor must be on record
as a supervisor, or reports done for a supervisor not on record will not be
given credit. Do not wait to begin employment before checking that the
Appraisal Board has received the form and documented the supervision in
both of your files.
2. Make sure that either you sign the appraisal report, or, if you do not sign the
report, that the appraisal report states that you have provided significant real
estate appraisal assistance in the preparation of the report.
3. Keep a copy of the appraisal report for your own records, or have an agree-ment
in writing with your supervisor that the supervisor will give you a copy
of any appraisal report you work on if you ask for it.
4. Make sure that a supervisor accompanied you on the first 50 appraisals you
did once you are registered.
5. Make sure your supervisor goes with you on all inspections of the subject
property, no matter how many appraisals you have done, if the property is
located more than 50 miles from the supervisor’s primary business location.
6. Make sure that your supervisor completes the Supervisor Verification of
Experience form for all appraisals you do, and that you have a copy of that
form for each appraisal.
7. Make sure that you are using the most recent Appraisal Board appraisal log to
report your experience. Older versions will not be accepted.
2
Published as a service to appraisers to promote a bet-ter
understanding of the Law, Rules and Regulations,
and proficiency in ethical appraisal practice. The arti-cles
published herein shall not be reprinted or repro-duced
in any other publication, without specific refer-ence
being made to their original publication in the
North Carolina Appraisal Board Appraisereport.
NORTH CAROLINA
APPRAISAL BOARD
Mailing Address:
P. O. Box 20500
Raleigh, North Carolina 27619- 0500
Street Address:
3900 Barrett Drive, Suite 101
Raleigh, North Carolina 27609
Phone: 919/ 420- 7920
Fax: 919/ 420- 7925
Website:
www. ncappraisalboard. org
Email Address:
ncab@ ncab. org
Michael F. Easley, Governor
APPRAISAL BOARD MEMBERS
Henry E. Faircloth
Chairman . . . . . . . . . . . . . . . . . . . . . Salemburg
Earl M. Worsley, Jr.
Vice- Chairman . . . . . . . . . . . . . . . . Wilmington
Bart Bryson . . . . . . . . . . . . . . . . . Hendersonville
Charles K. Hinnant . . . . . . . . . . . . . . . . . . . Kenly
E. Ossie Smith . . . . . . . . . . . . . . . . . . . . . . Oxford
J. Vance Thompson . . . . . . . . . . . . . . . . . . . Elkin
Larry N. Wright . . . . . . . . . . . . . . . . . . . . Candler
STAFF
Philip W. Humphries, Executive Director
Roberta A. Ouellette, Legal Counsel
Matthew W. Green, Deputy Director
Donald T. Rodgers, Deputy Director
Donna K. Krites, Investigator
Preston “ Buddy” Tucker, Investigator
Kim N. Giannattasio, Administrative Assistant
Lynn White, Appraiser Secretary
Paula Ford, Appraiser Clerk
Christy Henson, Office Assistant
APPRAISER COUNT
( As of January 24, 2005)
Trainees . . . . . . . . . . . . . . . . . . . . . . . . . . . 1235
Licensed Residential . . . . . . . . . . . . . . . . . . . 388
Certified Residential . . . . . . . . . . . . . . . . . . 1837
Certified General . . . . . . . . . . . . . . . . . . . . . 935
Total Number . . . . . . . . . . . . . . . . . . . . . . 4395
APPRAISER
EXAMINATION RESULTS
July- December 2004
Examination Total Passed Failed
Trainee 207 148 59
Licensed Residential 32 29 3
Certified Residential 54 31 23
Certified General 14 5 9
Examinations are administered by a national testing
service. For information, please contact the North
Carolina Appraisal Board in writing at
P. O. Box 20500, Raleigh, NC 27619- 0500.
On February 20, 2004, the
Appraiser Qualifications Board of The
Appraisal Foundation adopted changes
to the Real Appraiser Qualification
Criteria that will become effective on
January 1, 2008. These changes repre-sent
the minimum national require-ments
that each state must implement
for individuals applying for a real estate
appraiser license or certification as of
January 1, 2008. The changes include
increased required education, which is
summarized as follows:
3
Important Changes To Appraiser Qualifications!!!
Current 1/ 1/ 08
Category Requirements Requirements 1/ 1/ 08 College- Level Course Requirements
License 90 Hours 150 Hours None
Certified Residential 120 Hours 200 Hours Twenty- one ( 21) semester credit hours covering the following
subject matter courses: English Composition; Principles of
Economics ( Micro or Macro); Finance; Algebra, Geometry or
higher mathematics; Statistics; Introduction to Computers- Word
Processing/ Spreadsheets; and Business or Real Estate Law. In
lieu of the required courses, an Associate degree will qualify.
Certified General 180 Hours 300 Hours Thirty ( 30) semester credit hours covering the following subject
matter courses: English Composition; Micro Economics; Macro
Economics; Finance; Algebra, Geometry or higher mathematics;
Statistics; Introduction to Computers – Word Processing/
Spreadsheets; Business or Real Estate Law; and two ( 2) elective
courses in accounting, geography; ag- economics; business man-agement;
or real estate. In lieu of the required courses, a
Bachelors degree will qualify.
The Appraiser Qualifications Board
( AQB) of the Appraisal Foundation has
adopted new standards for education
for appraisers effective January 1, 2008.
As of that date, applicants seeking to be
licensed or certified appraisers must
have substantially more education than
is currently required. Questions have
arisen regarding education obtained
before January 1, 2008.
There are two options for imple-mentation
of this change. The first
option, the “ drop dead’ or “ firm date”
option, requires that before any license
or certificate can be issued on or after
January 1, 2008, the applicant must
meet the new education requirement.
The second option, the “ segmented”
option, breaks down certification into
three components: education, experi-ence,
and examination.
The North Carolina Appraisal
Board has adopted the segmented
option in North Carolina.
Under the segmented option, an
applicant must meet the criteria in
effect at the time the segment is com-pleted,
not the criteria in effect when
the application is filed or when the
license or certificate is issued. For
example, if a state- certified residential
appraiser currently desires to upgrade
to state- certified general, he or she must
complete an additional 60 hours of edu-cation,
consisting of G- 2 and G- 3, and
pass the examination. Under the seg-mented
approach, if the appraiser takes
the additional 60 hours before January
1, 2008, he or she does not have to com-ply
with the new 2008 educational
requirement.
The examination to become a
licensed or certified appraiser will be
changed effective January 1, 2008. If an
applicant completes his or her educa-tion
prior to January 1, 2008 and files an
application with the Board, the old
examination can be taken up to and
including December 31, 2007. If the
applicant does not pass the examina-tion
before January 1, 2008, the appli-cant
will have to take and pass the new
examination.
Segmented Option For 2008 Appraiser
Education Changes
2005
Board Meeting Dates
January 18- 19
February 15- 16
March 15- 16
April 19- 20
May 17- 18
June 21- 22
July 19- 20
August 16- 17
September 20- 21
October 18- 19
November 15- 16
December 13- 14
The Office of the Commissioner of
Banks ( OCOB) provided the following
guidance on their agency’s procedures
for handling unpaid appraisal
complaints.
The following provisions of the
Mortgage Lending Act require brokers
and lenders to promptly pay, when due,
fees for appraisals they requested be
done. This same statute also prohibits
them from attempting to inappropriately
direct an appraiser in the performance
of his/ her job.
§ 53- 243.11. Prohibited activities.
In addition to the activities prohibit-ed
under other provisions of this
Article, it shall be unlawful for any per-son
in the course of any mortgage loan
transaction:
( 9) To fail promptly to pay when
due reasonable fees to a licensed ap-praiser
for appraisal services that are:
a. Requested from the appraiser in
writing by the mortgage broker or
mortgage banker or an employee of
the mortgage broker or mortgage
banker; and
b. Performed by the appraiser in
connection with the origination or
closing of a mortgage loan for a cus-tomer
or the mortgage broker or
mortgage banker.
( 11) To influence or attempt to influ-ence
through coercion, extortion, or
bribery, the development, reporting,
result, or review of a real estate ap-praisal
sought in connection with a
mortgage loan. Nothing in this subdivi-sion
shall be construed to prohibit a
mortgage broker or mortgage banker
from asking the appraiser to do one or
more of the following:
a. Consider additional appropriate
property information.
b. Provide further detail, substan-tiation,
or explanation for the
appraiser’s value conclusion.
c. Correct errors in the appraisal
report.
If a licensed broker or lender en-gages
in these prohibited activities, they
are subject to penalties or loss of license
under the Mortgage Lending Act.
Unpaid appraisal complaints are
processed by the Consumer Assistance
Group if at least ninety days have
passed from the date the fee was due
( most often near or at closing) and sup-portive
documentation is included i. e.,
the appraisal request form, past due
invoice, any related written contracts,
and evidence of collection attempts. We
will not reject any complaint filed soon-er
than this, but will ( i) hold it as “ pend-ing”
and ( ii) generate a response letter
addressed to the complaining appraiser
requiring the complainant to contact us
again at or after the 91st day if he or she
still hasn’t been paid. We expect the
appraiser to have exhausted all reason-able
means of collecting the outstanding
balance before submitting a complaint
to our office. Our office will not under-take
to adjudicate disputes between an
appraiser and lender/ broker. One way
to ensure that no facts are in dispute is
to obtain a judgment against the lender/
broker prior to submitting a complaint
to this office.
The OCOB advises appraisers to
use its website www. nccob. com to veri-fy
their client is licensed as a mortgage
lender/ broker before submitting a com-plaint.
Real estate and property man-agement
companies, national banks,
federally chartered thrifts, credit
unions, and certain entities of those
wholly owned subsidiaries are not
required to be licensed by the OCOB;
thus, the OCOB has limited jurisdiction
over them.
Once a complaint has been filed
with supporting documentation, the
Consumer Assistance Group sends a let-ter
to the respondent requesting a writ-ten
response within three weeks. Upon
receipt of the response, it is reviewed to
determine if the complaint has been
resolved or if continued investigation is
needed. As stated, failure to follow the
law may have serious consequences for
the lender/ broker; however, this office
does not view itself as a collection agen-cy
for appraisers. Appraisers need to
take some responsibility to check out
the clients and discontinue working for
them if not paid in a timely manner.
4
Information from the Office of the Commissioner
of Banks for Real Estate Appraisers
RULEMAKING
IN PROGRESS
The Appraisal Board has be-gun
the process of changing
some of its rules. The pro-posed
text of the rules will be
published in the March 15,
2005 edition of the North
Carolina Register, which
can be viewed on line at
http:// www. ncoah. com/ rules/
register/. A public hearing
will be scheduled for some
time after that date. Check
the Board’s website for up- to-date
information.
In Memory
Pioneer member of the
North Carolina Appraisal Board,
William G. Brown,
passed away July 9, 2004.
Mr. Brown served a
three- year term beginning
in 1991 after appointment by
former Governor Jim Martin.
Adopted December 14, 2004
Many appraisals require the ap-praiser
to measure structures, calculate
areas and report the results. These
actions are an important component in
development of the cost, sales and
income approaches to value. Many
provisions of the Uniform Standards
of Professional Appraisal Practice
( USPAP) apply to measurement, area
calculation and description of property
improvements, including the ETHICS,
COMPETENCY, JURISDICTIONAL EX-CEPTION,
and SUPPLEMENTAL STAND-ARDS
RULES, as well as Standards
Rules 1- 1( a), ( b) and ( c), 1- 2( e)( i), 2- 1( a)
and ( b), and 2- 3.
The appraiser’s objective must be
to measure accurately, calculate compe-tently,
and describe the various areas of
an improvement in a manner that is not
misleading and facilitates understand-ing
of the property. The North Carolina
Appraisal Board recognizes that assign-ments
from various clients and for vari-ous
purposes may require adherence to
specific supplemental standards for
measurement, calculation and descrip-tion.
Appraisers may need to utilize,
among others, supplemental standards
imposed by courts, secondary mortgage
market or mortgage guaranty agencies,
or other governmental agencies.
No one scheme for measuring, cal-culating
areas and describing improve-ments
can perfectly address all the var-ied
designs and construction types
found in North Carolina real estate. For
each method, exceptions are easily
identified. No one standard or method-ology
can measure market reaction.
Thus, responsibility lies with appraisers
to engage their experience and judg-ment
so as to apply supplemental stan-dards
and methodologies relating to
square footage in a manner that is not
misleading and does not conflict with
the Uniform Standards of Professional
Appraisal Practice.
The North Carolina Appraisal
Board recognizes, but does not require
adherence to, ANSI Standard Z765- 2003,
titled “ American National Standard for
Single- Family Residential Buildings”,
“ Square Footage- Method for Calculat-ing.”
In addition, the Appraisal Board
recognizes, but does not require adher-ence
to, the Residential Square Footage
Guidelines published by the North
Carolina Real Estate Commission
( known as the “ yellow book”). The
Appraisal Board considers that using
either of the above standards as
guidelines for measuring and calcu-lating
areas is appropriate appraisal
methodology.
In certain assignments the apprais-er
may be required to rely on subject
property measurements, calculations
and descriptions supplied by clients, or
obtained from other sources such as
governmental agencies, builders, archi-tects,
engineers or marketing organiza-tions.
Such reliance should be ex-plained
in the scope of work of the
appraisal. When the appraiser relies on
data developed by others, this fact must
be clearly disclosed in the report.
The description of areas below
grade has been an item of controversy
for many years. Appraisers should exer-cise
care when describing areas which
may be characterized as basement, gar-den
level, semi- basement, walk out
basement, or the like. At times, addi-tional
photographs may be advisable to
assist the reader in understanding the
subject property. A description of the
level of finish may also assist recipients
of reports. These cautions have particu-lar
application to hillside and multi- level
structures.
Note: The ANSI Standard may be
ordered from:
NAHB Research Center, Inc.
400 Prince George’s Boulevard
Upper Marlboro, MD 20774- 8731
Inquiry Phone: ( 301) 249- 4000
Order Phone: 1- 800- 638- 8556
An online version is available at:
www. nahbrc. org/ bookstore
The Residential Square Footage Guide-lines
may be ordered from:
North Carolina Real Estate
Commission
PO Box 21500
Raleigh, NC 27619
( 919) 875- 3700
An online version is available at:
http:// www. ncrec. state. nc. us/
5
Appraisal Board Guidelines on Measurement,
Calculation and Reporting of Square Footage of
Residential Improvements to Real Estate
RENEWAL NOTICES
The Appraisal Board will mail renewal notices to
licensees in early May. This will be the only renew-al
notification appraisers will receive from the
Board’s office. Renewal fees and forms must be
submitted by June 30th to avoid late fees.
Who is my client? What are my obliga-tions
to my client? When do those obliga-tions
end? Can my client have me reassign
the report to others? Can I appraise the
same property for a different client? What if
the lender hires me but the homeowner
pays my fee at the door? These are some of
the many questions we receive regarding the
appraiser- client relationship.
Question 1. I recently performed an
appraisal on a subject property for a lender,
and now a mortgage broker has contacted
me to ask me if I can transfer the report to
him. He wants to have a different lender’s
name placed in the client line. He says he
has the permission of the first lender for me
to do this. Is this okay under USPAP?
Answer: No. Once a report has been
prepared for a named client, the apprais-er
cannot readdress or transfer the report
to another party. Simply changing the
client name on the report cannot change
or replace the original appraiser- client
relationship that was established with the
first client. See Advisory Opinion 26 for
more information.
Question 2. I know that I cannot
transfer a report from one client to another,
but I get calls all the time asking me to do
this. Is there any way I can accept the assign-ment
and comply with USPAP?
Answer: Yes. The appraiser can con-sider
the request a new assignment and es-tablish
a new appraiser- client relationship
with the second client. See Advisory Opin-ion
27 for more information.
Question 3. I recently performed an
appraisal on a subject property and a
new lender contacted me to request a sep-arate
but complete appraisal on the same
property. Can I do this new assignment?
Answer: Yes. As long as the ap-praiser
does not use any confidential infor-mation
given to him or her by the first client,
the appraiser can accept an assignment to
appraise the same property for a different
client. See Advisory Opinion 27 for more
information.
Question 4. The lender hired me to
do an appraisal, and told me to collect at
the door. The homeowners paid my fee,
and now they want a copy of the report.
What can I do?
Answer: USPAP defines the client as
“ the party or parties who engage an apprais-er
( by employment or by contract) in a spe-cific
assignment”. The determining factor is
not who pays for the appraisal or how it is
paid, but who contacted the appraiser in the
first place and placed the appraisal order.
For a federally- related transaction, federal
law requires the lender to be the one to
engage the appraiser’s services. In many, if
not most cases, the homeowner pays for the
appraisal either directly to the appraiser or
indirectly through the lender, thus payment
for services is not the determining factor. In
the above scenario, it is the lender who is
the client, not the homeowner, and the
appraiser cannot give a copy of the report to
the homeowner without the lender’s
consent.
Lenders are required by federal law
( the Equal Credit Opportunity Act) to fur-nish
a copy of the appraisal to the borrower
if the borrower requests a copy in writing.
This applies to both consumer and business
loans for which real estate will be collateral.
If the homeowner wants a copy of the ap-praisal,
they can be told to contact the
lender directly or the appraiser can ask the
client for permission to send a copy.
Question 5. A mortgage broker
hires me to appraise a property. The bro-ker
asks that his name not be used as the
client, but that I instead identify the
client as a local lender on the written
appraisal report. The mortgage broker’s
name or relationship to the parties is not
to be mentioned in the report. Can I do
this?
Answer: Once an appraiser places a
client name on the appraisal report, that per-son
or company is the client, resulting in an
appraiser- client relationship. If a mortgage
broker wants an appraiser to perform an ap-praisal
on a property that will then be offered
to several lenders, the appraiser should not
submit an appraisal report naming anyone
other than the broker as the client. The
appraiser could state that intended users
include lending institutions, without naming
any one lender. If the appraiser does state a
client name in the appraisal report, the
appraiser cannot simply change the name of
the client and submit the appraisal to a new
lender ( See Question 1 above).
Question 6. What if it is the home-owner
who engages my services and
wants me to put a lender’s name on the
report as the client?
Answer: First of all, before the ap-praiser
accepts the assignment, the apprais-er
must disclose to the homeowner that a
lender or its agent is required to directly
engage the services of an appraiser in a fed-erally-
related transaction. The appraiser
should make it clear to the homeowner that
a lender may not accept the report even if he
states on the report that the lender is the
client. Also, the homeowner should be
informed that once the appraiser states in
the report the name of the client, the
appraiser cannot change the name of the
client on the report.
For more information on these and
other questions, see Advisory Opinions 26
and 27.
Analyzing and Reporting
of Exposure Time
Question 1. Why was language in
STATEMENT No. 6 related to the reporting of
exposure time deleted from USPAP?
Answer: The following passage,
The discussion of reasonable exposure
time should appear in an appropriate
section of the appraisal report, one that
presents the discussion and analysis of
market conditions, and also be refer-enced
at the statement of the value defi-nition
and at the value conclusion.
was deleted from STATEMENT No. 6
Reasonable Exposure Time in Real Property
and Personal Property Market Value Opinions
because:
6
Reissuing Or Assigning An Appraisal Report
USPAP
Questions &
Answers
• USPAP requires that each real property
and personal property appraisal report
contain sufficient information to enable the
intended users of the appraisal to under-stand
the report properly. Meeting this
requirement does not require the reporting
of exposure time in all assignments;
• The amount of detail in which exposure
time is reported should be determined
based on the intended user, the intended
use and the type and definition of value. It
should not be a “ one- size- fits- all” reporting
requirement for every appraisal assign-ment;
and
• The reporting requirement for all com-ments
related to the definition of value,
including exposure time, is incorporated
in the Comment to Standards Rules 2-
2( a)( v), 2- 2( b)( v), 8- 2( a)( v), and 8- 2( b)( v),
which states:
Stating the definition of value requires the
definition itself, an appropriate reference
to the source of the definition, and any
comments needed to clearly indicate to
the reader how the definition is being
applied. ( bold added for emphasis)
If disclosure of the exposure time is nec-essary
for intended users to understand
the report, this reporting requirement
necessitates inclusion of an appropriate
discussion.
Note: The deletion in STATEMENT No. 6
related to the reporting of exposure time
does not change the development require-ment
to analyze exposure time if the value
opinion to be developed is market value, i. e.,
Standards Rules 1- 2( c)( iv) and 7- 2( c)( iv).
Appraising Land
Question 2. I am appraising a prop-erty
improved with an apartment complex,
but have found that the land is zoned for
commercial use. My research indicates that
such commercial land would have a value
different from that of apartment land, but
still far less than the current total value of
the apartment complex.
According to USPAP, how should I value
the land?
Answer: USPAP does not dictate the
use of any particular theory or technique.
You may apply any method, as long as it is
recognized, applicable, and correctly
employed. SR 1- 1( a) only requires the
appraiser to correctly employ those recog-nized
methods and techniques that are neces-sary
to produce a credible appraisal.
Edits to the 2005 edition of USPAP re-sulted
in the elimination of language in the
Standards Rules that appeared to require a
particular theory.
Type and Definition of Value,
and Citation of Source
Question 3. USPAP requires appraisal
reports to identify the type and definition of
value and cite the source of the definition.
What is the “ type of value?” Why is this no
longer referred to as the “ purpose” of the
assignment? What sources can be used to
comply with the requirement to cite the
source of the definition of value?
Answer: STANDARDS 2, 6, 8 and 10
require that appraisal reports state the type
and definition of value and cite the source of
the definition. The exact wording varies by
reporting option.
Previously, the term “ purpose” in
USPAP was used to refer to several different
concepts, including the type and definition
of value. For the 2005 edition of USPAP, this
and other special meanings of this term
were eliminated to increase clarity. Where it
is now used “ purpose” will only convey the
standard dictionary meaning of the word.
The “ type of value” is the general class
or category of value. Examples include mar-ket
value or fair value.
The “ definition of value” provides a
specific description of the characteristics
and conditions of the type of value.
Examples include definitions provided on a
form report, in FIRREA, in U. S. accounting
regulations, and U. S. tax regulations.
USPAP does not provide any specific
definition of value or endorse any particular
source. Sources could include, for example,
a regulatory agency, a legal jurisdiction, an
engagement letter, or a textbook.
Reporting Use of Extraordinary
Assumptions and Hypothetical
Conditions
Question 4. What are the USPAP re-porting
requirements relating to the use of
extraordinary assumptions and hypothetical
conditions in an appraisal assignment?
Answer: The report must clearly dis-close
the use of extraordinary assumptions
and hypothetical conditions and notify
intended users that the extraordinary
assumptions and hypothetical conditions
might have affected the assignment results.
For example, Standards Rule 2- 1 ( c) states
that each written or oral real property
appraisal report must:
clearly and accurately disclose all assump-tions,
extraordinary assumptions, hypo-thetical
conditions, and limiting conditions
used in the assignment. ( bold added for
emphasis)
This requirement creates an obligation to dis-close
all extraordinary assumptions and hypo-thetical
conditions used in the assignment.
For example, Standards Rule 2- 2 ( a)( viii)
states that Self- Contained Appraisal Report
must, at a minimum:
( viii) clearly and conspicuously:
• state all extraordinary assumptions
and hypothetical conditions; and
• state that their use might have affect-ed
the assignment results; ( bold
added for emphasis)
This requirement directs the appraiser
to provide a clear and conspicuous state-ment
of the extraordinary assumptions and
hypothetical conditions. The form and loca-tion
of the statement is left to the discretion
of the appraiser, but it must be clear and
conspicuous to intended users.
The requirement further directs the
appraiser to provide notice to intended
users that the use of the extraordinary
assumptions and hypothetical conditions
might have affected the assignment results.
The appraiser is not required to report on
the impact of the extraordinary assumptions
and hypothetical conditions on assignment
results.
Note: The requirements for other report
types are similar. Neither appraiser is
required to have custody of the workfile.
However, an appraiser who does not have
custody must make appropriate arrange-ments
for retention, access, and retrieval.
For further information, regarding USPAP
Q& A, please contact: John S. Brenan,
Director of Research & Technical Issues, The
Appraisal Foundation, 1029 Vermont Avenue
NW, Suite 900, Washington, DC 20005. ( 202)
624- 3044 ( 202) 347- 7727, fax.
7
8
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Residential Construction Cost ( 7/ 7)
Residential Construction Seminar ( 14/ 14)
Rules & Regs FHA/ HUD Requirements ( 14/ 14)
Staying Out of Trouble – NC Ap ( 7/ 7)
The Narrative Appraisal Report ( 7/ 7)
Using Streamlined Appraisal Report Forms ( 7/ 7)
DUKE UNIVERSITY
A108B LSRC/ Box 90328
Durham, NC 27708 ( 919) 613- 8082
What’s it Worth - Forest Appraisal ( 36/ 30)
DYNASTY SCHOOL
2373 S. Hacienda Boulevard
Hacienda Heights, CA 91745 ( 800) 888- 8827
National USPAP Update ( 7/ 7)
EDGECOMBE CC
225 Tarboro Street
Rocky Mount, NC 27801 ( 252) 446- 0436
Appraising Manufactured, Modular & Mobile ( A) ( 7/ 7)
Appraising Manufactured, Modular & Mobile ( B) ( 7/ 7)
Cost Appr Marshall & Swift Res & Co ( 7/ 7)
Income Capitalization ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Manufactured, Modular & Mobile ( 4/ 4)
Narrative Appraisal Report Writing ( 14/ 14)
National USPAP Update ( 7/ 7)
Pricing Small Income Properties ( 4/ 4)
Principles & Techniques Val 2- 4 Units Res Prop ( 14/ 14)
Real Estate Finance for Appraisers ( 14/ 14)
Rural Valuation Seminar ( 14/ 14)
Single Family Residential Appraisal ( 14/ 14)
Standards of Professional Practice ( 15/ 15)
USPAP & NC Board Rules & Regs For ( 15/ 15)
ELLIOTT & COMPANY APPRAISES
3316- A Battleground Avenue
Greensboro, NC 27410 ( 336) 854- 3075
Nuts & Bolts of Appraising ( 14/ 14)
EMPLOYEE RELOCATION COUNCIL
1717 Pennsylvania Avenue NW # 800
Washington, DC 20006- 4665 ( 202) 862- 4236
Relocation Appr Training Prog ( 6/ 6)
Approved Continuing Education Courses
( As of January 5, 2005)
Listed below are the courses approved for appraiser continuing education credit as of date shown above. Course sponsors are listed alphabetically
with their approved courses. Shown parenthetically beside each course title are sets of numbers [ for example: ( 15/ 10)]. The first number indicates the
number of actual classroom hours and the second number indicates the number of approved continuing education credit hours. You must contact the
course sponsor at the address or telephone number provided to obtain information regarding course schedules and locations.
FOUNDATION OF RE APPRAISERS
2140 W. Chapman Avenue # 107
Orange, CA 92868 ( 714) 935- 1161
National USPAP Update ( 7/ 7)
HIGNITE TRAINING SERVICE
208 Gloria Street
Greenville, NC 27858 ( 252) 756- 7288
Appraisal FAQ’s ( 14/ 14)
National USPAP Update ( 7/ 7)
The Review and The Reviewer ( 7/ 7)
INSTITUTE OF GOVERNMENT, UNC CHAPEL
HILL
Knapp Building, CB# 3330
Chapel Hill, NC 27514 ( 919) 966- 4157
Appr of Commercial Prop in a Declining Market ( 7.5/ 7)
Appraisal of Land ( 30/ 30)
Assessment Administration ( 30/ 7)
Fundamentals of Assessment Ratio Studies ( 16/ 16)
Fundamentals of Mass Appraisals ( 30/ 30)
IAAO 101: Fundamentals of Real Prop ( 30/ 30)
IAAO 102: Inc Approach to Valuation ( 30/ 30)
Income Approach to Valuation II ( 30/ 30)
Marshall & Swift – Commercial ( 13/ 13)
Principles & Techniques of Cadestral Mapping ( 30/ 30)
Residential Modeling Concepts ( 30/ 30)
INTERNATIONAL RIGHT OF WAY
ASSOCIATION
19750 S. Vermont Avenue, Suite 220
Torrance, CA 90502- 1144 ( 213) 538- 0233
103 Ethics & Right of Way Profession ( 8/ 8)
403 Easement Valuation ( 8/ 8)
801 Land Titles ( 10/ 10)
JOHNSTON CC
P. O. Box 2350
Smithfield, NC 27577 ( 919) 934- 3051
Appraisal 2004 ( 7/ 7)
I’ve Got This House ( 7/ 7)
Manufactured Homes ( 7/ 7)
National USPAP Update ( 7/ 7)
JVI
222 South Westmonte Drive, Suite 206
Altamonte Springs, FL 32714 ( 407) 774- 3344
Appraising REO Properties
LENOIR CC
P. O. Box 188
Kinston, NC 28502- 9946 ( 252) 527- 6223
Appraising Manufactured, Modular, & Mobile ( A) ( 7/ 7)
Appraising Manufactured, Modular, & Mobile ( B) ( 7/ 7)
Challenging the Appraisal ( 4/ 4)
Cost Approach Marshall & Swift ( 7/ 7)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Maximizing Value ( 4/ 4)
National USPAP Update ( 7/ 7)
NC Rules & Regulation Update ( 7/ 7)
Pricing Complex Properties ( 4/ 4)
Pricing Small Income Properties ( 4/ 4)
Principles/ Techniques Val 2- 4 Unit Residential ( 14/ 14)
USPAP & NC Rules & Regulations for App ( 15/ 15)
M CURTIS WEST
P. O. Box 947
Zebulon, NC 27597 ( 919) 217- 8040
USPAP 2002/ 2003 ( 7/ 7)
MCKISSOCK APPRAISAL SCHOOLS
P. O. Box 1673
Warren, PA 26365 ( 814) 723- 6979
2- 4 Family Finesse: Appraising Multi- Family
Properties ( 7/ 7)
Appr For the Secndary Market ( 7/ 7)
Appraising High Value Residential Properties ( 7/ 7)
Appraisal Review ( 7/ 7)
Appraiser Liability ( 7/ 7)
Appraising the Oddball ( 7/ 7)
Disclosures and Disclaimers ( 7/ 7)
Does My Report Comply with USPAP? ( 7/ 7)
Legal Issues for Appraisers ( 7/ 7)
Lmtd Apprs & the Scope of Wk D ( 7/ 7)
Made in America: Apprising Factory Built Housing ( 7/ 7)
National USPAP Update ( 7/ 7)
National USPAP ( 15/ 15)
O/ L Appr for the Secondary Market ( 7/ 7)
O/ L Appraiser Liability ( 7/ 7)
O/ L Construction Details & Trends ( 7/ 7)
O/ L Factory- Built Housing ( 7/ 7)
RE Damages: Assessment & Testi ( 7/ 7)
Real Estate Fraud & Appraiser’s Role ( 7/ 7)
Residential Construction ( 7/ 7)
MEL BLACK
P. O. Box 459
Cherryville, NC 28021 ( 704) 435- 0753
2- 4 Family Properties ( 7/ 7)
Board Rules and Laws ( 7/ 7)
National USPAP Update ( 7/ 7)
Trainees & Supervisors ( 7/ 7)
Value? What Value ( 4/ 4)
MINGLE SCHOOL OF REAL ESTATE
P. O. Box 35511
Charlotte, NC 28235 ( 704) 372- 2984
Is This A Commercial Appraisal? ( 4/ 4)
NC RE Appr Act & Appraisal Board Rules ( 4/ 4)
Role of the Supervisory Appraiser ( 4/ 4)
MOULTRIE B. WATTS
P. O. Box 447
Cary, NC 27512 ( 919) 851- 2100
National USPAP Update ( 7/ 7)
NAIFA
7501 Murdoch Avenue
St. Louis, MO 63119 ( 314) 781- 6688
1.2 Dfndng, Dcmntng & Spprtng ( 4/ 4)
1.4B Commercial Report Writing ( 15/ 15)
11.8A Calculating Gross Living Area Using ( 7/ 7)
15.0 Intro to Automated Valuation Model Tech
Seminar ( 4/ 4)
15.1 Environmental Concerns Seminar ( 4/ 4)
16.0A Understanding Legal Des ( 4/ 4)
16.2C Appraisal of Foreclosure ( 4/ 4)
2.0 Financial Analysis Inc Property ( 15/ 15)
4.7B Preparing Your Listing for FHA ( 4/ 4)
5.0 National USPAP Update ( 7/ 7)
5.3 Scope of Work ( 8/ 8)
9.7 Fannie Mae Updated Prop & A ( 8/ 8)
9.7A Fannie Mae Update ( 4/ 4)
99.1A Fraud, Flip and the FBI ( 4/ 4)
99.7A Blue Print Reading Seminar ( 4/ 4)
Mobile/ Manufactured Home Re ( 8/ 8)
NC RE EDUCATION FOUNDATION ( NCAR)
4511 Weybridge Lane
Greensboro, NC 27407 ( 800) 443- 9956
Legal Issues in Real Estate ( 7/ 7)
National USPAP Update ( 7/ 7)
Residential Construction ( 7/ 7)
Residential Real Estate as an Investment ( 7/ 7)
Tax Planning for the Real Estate Agent ( 7/ 7)
NCDOT
1605 Westbrook Plaza Drive, Suite 301
Winston- Salem, NC 27103 ( 336) 760- 1925
Apply Marshall & Swift and Valuing Medical/
Assisted Living Facilities ( 7/ 7)
Appr Board Speaks to You/ Ct Rm Eti ( 7/ 7)
Appraisal of Residue & Special Use Properties ( 7/ 7)
National USPAP Update ( 7/ 7)
NC Rules & Regulations – USPAP Update/ Avd Ltg ( 7/ 7)
Revisiting the Cost Approach & Recurring Errors ( 7/ 7)
Sales Comp Grid/ Appr of Trans ( 7/ 7)
Trending Via Demographics/ Appraising Land for
Development Potential ( 7/ 7)
NCPAC
2801- 3V Ward Boulevard
Wilson, NC 27893 ( 252) 291- 1200
Changes in the Appraisal Profession ( 4/ 4)
USPAP Instructor Recertification ( 7/ 7)
NCSU FORESTRY ED OUTREACH PROGRAM
Campus Box 8003
Raleigh, NC 27695 ( 919) 515- 3184
Accurate Forest Inventory ( 16/ 16)
Applied Intermediate GIS – Foresters ( 15/ 15)
Conservation Design: Greener Comm ( 14/ 7)
Dlntn of Pdmnt & Cstl Pln Jrsd ( 30/ 30)
Introduction to Applied GIS – Foresters ( 15/ 15)
Introduction to Applied GPS – Foresters ( 13/ 13)
NCSU SOIL SCIENCE DEPT
Campus Box 7619
Raleigh, NC 27695 ( 919) 513- 1678
Basics of On- Site Sewage ( 7/ 7)
Getting the Dirt on Soils ( 7/ 7)
On- Site System Tech Refresh ( 7/ 7)
Septic System Options for Diff ( 14/ 14)
Wastewater in the Environment ( 7/ 7)
Wells & Septic Systems ( 4/ 4)
REALETECH. COM
4819 Drummond Drive
Wilmington, NC 28409 ( 910) 352- 9693
Appraisers and Residential Reviews ( 7/ 7)
Fannie Mae Guidelines for Appraises ( 7/ 7)
Introduction to Environmental Risk Screenings ( 7/ 7)
National USPAP Update ( 7/ 7)
What the NC Appraisal Board Expects from You ( 4/ 4)
STACEY P. ANFINDSEN
1145- E Executive Circle
Cary, NC 27511 ( 919) 460- 7993
Appraisal Process and Val of Residential Prop ( 4/ 4)
National USPAP Update ( 7/ 7)
Smry Frm Rptng & Cmplnce W U ( 4/ 4)
SURRY CC
P. O. Box 304
Dobson, NC 27017 ( 910) 386- 8121
Fannie Mae Updated Prop & App ( 8/ 8)
Home Inspections & Common De ( 4/ 4)
Is the Comparable Comparable ( 8/ 8)
Mobile Mfg Homes & Types of M ( 4/ 4)
National USPAP Update ( 7/ 7)
Reviewing a Residential Appraisal ( 8/ 8)
Testing Highest & Best Use ( 8/ 8)
T H HUNTER & ASSOCIATES, INC.
1908 Sterling Road
Charlotte, NC 28209 ( 704) 372- 5855
Appraiser as an Expert Witness ( 7/ 7)
Intro to Res RE Investment ( 7/ 7)
Land, Res & Com Investment St ( 7/ 7)
Understanding Appraiser Liability ( 7/ 7)
TOM DANIEL SCHOOL OF RE
2932 Breezewood Avenue, Suite 110
Fayetteville, NC 28303 ( 800) 865- 8301
Property Disclosure: Reducing Risks ( 4/ 4)
TRIANGLE APPRAISAL & REAL
ESTATE SCHOOL
2801- 3V Ward Boulevard
Wilson, NC 27693 ( 252) 291- 1200
or ( 919) 971- 1887
Manufactured Home Construction ( 7/ 7)
National USPAP Update ( 7/ 7)
New FNMA Forms ( 7/ 7)
North Carolina Rules ( 7/ 7)
WENDELL HAHN & ASSOCIATES
P. O. Box 245
Columbia, SC 29250 ( 803) 779- 4721
Appraisal Update ( 7/ 7)
FHA Guidelines 2001 ( 7/ 7)
National USPAP Update ( 7/ 7)
Property Inspection for the App ( 7/ 7)
The Modern Appraisal Office – Part I ( 7/ 7)
The Modern Appraisal Office – Part II ( 7/ 7)
Tools or Toys – Technology For ( 7/ 7)
WESTERN PIEDMOND COMMUNITY COLLEGE
1001 Burkemont Avenue
Morganton, NC 28655 ( 828) 438- 6104
Appraising Manufactured, Modular & Mobile ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Maximizing Value ( 4/ 4)
Manufactured, Modular & Mobile ( 7/ 7)
National USPAP Update Course ( 7/ 7)
Pricing Complex Properties ( 4/ 4)
USPAP & NC Rules and Regulations for App ( 15/ 15)
WORLD SAVINGS
4101 Wiseman Boulevard
San Antonio, TX 78251 ( 210) 543- 5464
Appraisal Review 2 ( 8/ 8)
Appraising in a Changing Market ( 4/ 4)
National USPAP Update ( 7/ 7)
9
Approved Continuing Education Courses
10
Appraisers obtain comparable sales
information from listing services, tax
records, real estate agents and others in
performing appraisals. For the most
part, that information is correct and reli-able.
Sometimes, however, the informa-tion
is incorrect and relying upon it will
result in a misleading appraisal.
USPAP Standards Rule 1- 4 ( a)
requires that appraisers “ collect, verify,
and analyze such comparable sales data
as are available to indicate a value con-clusion.”
This is a three- step process.
First, you obtain the information from
your data source. Then you are
required to verify the information from
another source. Finally, you analyze all
the information you received.
For example, if you obtain compa-rable
sales information form MLS, you
then verify the information by calling
the listing or sales agent, the tax office,
or another source. If there is any dis-crepancy
between these two sources,
you must continue to research the sale
until you are confident that the informa-tion
you will use in your analysis is cor-rect.
This is especially important if you
receive verbal information, especially
from a homeowner.
You should also be careful to cor-rectly
identify both your data source
and verification source, and to keep in
your workfile a copy of the information
relied upon for the appraisal. For exam-ple,
if you use listing service data as
your data source and tax records as
your verification source, you should
have a copy of the listing service sheet
and tax record in your file. Sometimes
you may receive information orally,
such as from the listing broker over the
telephone. You should make a note for
the file of your conversation, including
the name and telephone number of the
source of information and the date, as
well as a summary of the information
received.
Verifying information is even more
important when you are performing an
appraisal outside your geographic area.
It is difficult to know who will give reli-able
data and who will not. Listing serv-ices
may use different ways to report
items such as square footage. Lack of
knowledge about a particular market
area does not relieve the appraiser of
responsibility for the misinformation in
the report, since the USPAP Com-petency
Provision makes it clear that
appraisers in an unfamiliar location
must spend sufficient time to under-stand
the nuances of the local market.
Verification of comparable sales
information for manufactured housing is
especially important. You must make
sure that the sale is not a land home
package, since a land home package has
not been exposed to the market and is
not an appropriate comparable. If you
obtain a HUD settlement on the sale of a
manufactured home, you should always
check public records such as the deed
office. If the tax stamps indicate a much
lower sales price than that on the HUD
statement, it is likely that the sale was
for the land only, and you are dealing
with a land home package and you can-not
use the sale. When you find a man-ufactured
home sale in a listing service,
you still must verify that it was not a
land home package. In addition, since
there are often financing considerations
and incentives involved in the sale of
manufactured homes, you must analyze
the data very carefully to make sure to
take these into account.
The question is often raised as to
whether it is ever appropriate to use a
stick- built home as a comparison sale
for a manufactured home. Generally
speaking, it usually is not appropriate to
do so. There may be occasions, howev-er,
where there are no sales that can
legitimately be used, and stick built
homes that are similar to the subject are
all that are available. If such sales are
used, adjustments should be made for
all appropriate factors, especially quali-ty
of construction. The appraiser must
note that the comparison sales are stick
built and must explain why they were
chosen as comps for a manufactured
home.
USPAP requires appraisers to main-tain
a copy of the workfile for every
appraisal assignment for at least five
years after preparation or two years after
court testimony, whichever period
expires last, thus it is important to keep
copies of all information and verification
in the file. Remember, the appraiser and
anyone else signing the report take full
responsibility for the data in the report,
and if the information source provides
inaccurate data, that fact does not ab-solve
the appraiser of responsibility.
Verify Your Comparable Sales Information!
Continuing Education
REMINDER
Appraisers and trainees must have
28 hours of continuing education credit
in order to renew their licenses this year,
including the 7- hour National USPAP
Update course.
If you took the 15- hour National
USPAP course between July 1, 2003
and December 31, 2004, the 15- hour
class will count towards the 7- hour
USPAP class requirement. If you take
the 15- hour class on or after January
1, 2005, you may still receive continu-ing
education credit, but you will still
have to take the 7- hour National
USPAP Update course in order to
renew your registration, license or
certificate.
Appraisal Board rules allow you to
take up to 14 hours of the 28- hour
requirement as on- line courses. You
will not get continuing education cred-it
for any on- line courses that exceed
14 hours.
No continuing education credit will be
carried over from the 2003- 2005 edu-cation
cycle into the 2005- 2007 cycle.
11
Ronald Best ( Cornelius)— By consent,
the Board suspended Mr. Best’s general cer-tification
for a period of six months. The
Board ordered Mr. Best to take a sales com-parison
course, and a course in appraiser lia-bility
or NC Board laws and rules by May 1,
2005. If he completes the courses by that
date, the suspension will be inactive. Mr.
Best also agrees that he will no longer super-vise
any trainees. The Board found that a
trainee working under the supervision of Mr.
Best appraised a manufactured home locat-ed
in Shelby, NC in November 2003, finding
an appraised value of $ 90,000. The trainee
did not sign the report, and Mr. Best signed
the report on the left side. He then checked
the “ Did not inspect” box on the right side.
Respondent noted in an addendum that the
trainee had provided significant professional
assistance, including inspecting and measur-ing
the subject property. The appraisal
report stated that subject was on a paved
road, and the photograph of the street in the
report shows a paved road with markings.
The subject is actually at the end of a long
unpaved, fair to poorly maintained gravel
road. The MLS sheet in the work file states
that the subject road is gravel. The sales
prices of the first and second comparable
sales could not be verified in the public
records. Mr. Best stated that there had been
no prior sales of his third comparable sale
that took place within one year of the
appraisal, but there had in fact been one sale
within that time period. The trainee
obtained his comparable sales information
from MLS but did not verify the data. There
were limited sales of homes in the subject
neighborhood that were listed on the local
MLS.
Dewayne Boyd ( Wake Forest)— By
consent, the Board suspended Mr. Boyd’s
residential certification for a period of 18
months effective November 1, 2004. Before
Mr. Boyd can renew his certification, he
must complete all required continuing edu-cation,
and must successfully complete a 7-
hour sales comparison class and a course in
appraiser liability. The Board found that Mr.
Boyd completed an appraisal on two prop-erties
located in Zebulon, NC in September
2002, indicating final values of $ 101,000 and
$ 86,000. A local realtor with knowledge of
the historical and current local real estate
market estimated that the property would
sell for no more than $ 80,000 and that the
other property would sell for no more than
$ 50,000. Mr. Boyd selected comparable sales
for his appraisals of both properties that
were superior in location, design and appeal
when compared to the subject properties.
The subject neighborhoods included a mix-ture
of single- family and 2- 4 family homes.
One of the subject properties had double-wide
and singlewide homes in the neighbor-hood.
None of those characteristics were
mentioned in Mr. Boyd’s appraisal reports.
Michael Casey ( Raleigh)— By con-sent,
the Board suspended Mr. Casey’s resi-dential
license for a period of thirty days,
beginning November 2004. Mr. Casey also
must successfully complete a course in
property inspection by December 31, 2004. If
he fails to do so, he will receive an addition-al
one- month suspension. The Board found
that Mr. Casey appraised a property located
in Raleigh, NC in May 2003, finding an
appraised value of $ 850,000. He reported
that the house contained 5,239, when it actu-ally
contained 3989 square feet. Mr. Casey
admits that he added 1,250 square feet of
unfinished second level area to the heated
square footage by mistake. This error was
caused by incorrectly inputting the 1,250
square foot unfinished attic information into
his software program. The value for the sub-ject
property would have been lower based
on the correct square footage of 3,989.
Tammy Childers ( Kings Mountain)—
By consent, the Board suspended Ms.
Childers’ trainee registration for a period of
one year. The first month of the suspension
will become active on September 1, 2004.
The remaining months are stayed until
December 1, 2004. Ms. Childers also agrees
to take two courses approved by the
Appraisal Board; a sales comparison course
and the 15- hour national USPAP course.
These courses must be completed by
December 1, 2004, or the remainder of the
suspension will become active. The Board
found that Ms. Childers, while working
under the supervision of a state- licensed
appraiser, appraised a 2120 square foot
home located in Monroe, NC in December
2003, finding an appraised value of $ 230,000.
Sales in the subject subdivision were all
smaller than the subject property, ranging
from 1143 to 1804 square feet, so Ms. Childers
chose sales from other subdivisions located
near the subject subdivision. Those sales
were all of similar size, and adjustments
were made for differences in age. The sales
were located in neighborhoods that were
superior to the subject neighborhood in
maintenance, appeal and quality, yet Ms.
Childers made no adjustments for those fac-tors.
The unadjusted sales prices of the com-parable
sales were $ 231,000, $ 235,000 and
$ 252,000. The “ customer estimated value”
on the appraisal order form was $ 220,000.
The appraisal was done for refinancing pur-poses,
but the loan did not close.
Corey Clark ( Charlotte)— By consent,
the Board suspended Mr. Clark’s trainee reg-istration
for a period of six months. The sus-pension
is stayed until November 1, 2004.
Mr. Clark must take R- 3 and a 14- hour course
in standards ( USPAP) by November 1, 2004.
Since he took the courses, the suspension is
inactive. The Board found that Mr. Clark,
while working under the supervision of a
state licensed appraiser, appraised a home
located in Kannapolis, NC in November
2001, finding an appraised value of $ 100,000.
The subject property is a 36- year- old 920
square foot ranch. Although Mr. Clark
described the house as of average quality
and condition, he used cost figures for a
good quality home. He gave the house an
effective age of 10 years. There was no men-tion
in the appraisal report of any upgrades
or renovations. Mr. Clark stated that the con-dition
of the comparable sales was also aver-age,
even though they were either new or
one- year old, and he made no adjustments
for condition. All of the comparable sales in
the report were either new or one year old,
and Mr. Clark used an across the board
adjustment of minus $ 8,500 for age. There
were a total of 95 sales in the neighborhood
ranging in value from $ 22,000 to $ 127,500. Of
these sales, 20 were built between 1950 and
1980 which would have been within 15- years
on either side of the time the subject was
constructed. Those sales ranged predomi-nantly
from $ 70,000 to $ 85,000.
Robert C. Cox ( Morganton)—
Following a hearing, the Board revoked Mr.
Cox’s residential license. The Board found
that an appraiser previously employed by
Mr. Cox filed a complaint with the Board
alleging irregularities in the appraisal assign-ments
and reports she prepared while a
trainee in Respondent’s employment. She
further alleged that Respondent did not ade-quately
supervise her work and that he
made false statements on appraisal reports.
Although Mr. Cox sent in a response to the
complaint, he failed or refused to send in
Disciplinary Actions
The following is a summary of recent disciplinary actions taken by the Appraisal Board. This is only a summary; for brevity, some of the facts and conclu-sions
may have not been included. Because these are summaries only, and because each case is unique, these summaries should not be relied on as prece-dent
as to how similar cases may be handled.
12
thirteen appraisal reports after numerous
requests by Board staff that he do so, a vio-lation
of state law and Appraisal Board rules.
Arthur Dec ( Raleigh)— By consent, the
Board issued a reprimand to Mr. Dec. He
must also successfully complete a sales com-parison
course by December 1, 2004, or the
reprimand will be vacated and a one- month
suspension will be imposed as of that date.
The Board found that Mr. Dec appraised a
home located in Durham, NC in October
2003, finding an appraised value of $ 724,000.
The subject property is located on a gravel
road in a rural area. The comparable sales
are located on paved streets in subdivisions
that appear to be superior. Comparable 3 is
located on the fairway of a golf course. Mr.
Dec made no adjustments for location as he
believed the location adjustments were off-set
by the subject’s 2.06- acre site versus the
comparable sites of .7 to 1.18 acre sites.
There were other differences between the
subject and the comparable sales that Mr.
Dec offset in his appraisal process, but he
failed to mention in this appraisal report. He
also inadvertently left out 1294 square feet of
unfinished basement area on one of his com-parable
sales.
Margaret English ( Gold Hill)— By
consent, the Board accepted the voluntary
surrender of Ms. English’s residential
certification.
Norma Harless ( Lenoir)— By consent,
the Board suspended Ms. Harless’ residen-tial
license for a period of six months. She
must take a course in sales comparison
before her license will be returned to her.
The Board found that Ms. Harless performed
three appraisals of a property located in
Granite Falls, NC. The first appraisal was per-formed
in March 2002 and indicated a value
of $ 198,100. The second appraisal was per-formed
in August 2002 and indicated a value
of $ 212,000. The third appraisal report was
performed in October 2002 and indicated a
value of $ 239,000. The first appraisal report
correctly indicated that the subject had an
addition that was incomplete at the time of
the inspection, but Ms. Harless valued the
property as though the addition were com-pleted
even though she stated that the
appraisal was done “ as is”. The second two
appraisal reports stated that the addition
was complete, although it was not. She again
valued the property as though the addition
were complete, but did both those appraisal
reports “ as is”. Ms. Harless stated that the
actual age of the property was 28 years,
when in fact the subject dwelling was built in
1945, indicating an actual age of 57 years. She
averaged the actual age of the dwelling and
the age of the new addition to indicate her
actual age, but she did not provide an expla-nation
in the report. The sales utilized in the
appraisal reports were superior to the sub-ject,
and there were other sales available
that would have indicated a lower value for
the subject.
Nathan Henderson ( Wilmington)—
Following a hearing, the Board revoked Mr.
Henderson’s trainee registration. The Board
found that in August 2001, Mr. Henderson
filed an application to become a state- regis-tered
trainee. On his application, Mr.
Henderson reported that in September 1994,
he had been found guilty of possession of
drug paraphernalia and possession of mari-juana.
The Appraisal Board deferred his
application, and a hearing was held so that
Mr. Henderson could demonstrate that he
possessed the requisite trustworthiness,
honesty and integrity to engage in the busi-ness
of a real estate appraiser trainee. After
that hearing, the Appraisal Board granted his
application, and his registration as a trainee
was issued in December 2001. In June 2004,
Mr. Henderson notified the Board that he
had been charged with growing marijuana at
his personal residence. He admitted that he
was convicted in June 2004 of manufacturing
marijuana, a Schedule VI controlled sub-stance,
which is a felony conviction, and that
at the time of the hearing, he was on proba-tion
for that offense. He testified that he grew
the marijuana for his personal use as a way
to control pain. The pain was the result of a
1998 incident where his arm was severely
injured. Mr. Henderson presented no medi-cal
testimony regarding his injury or treat-ment.
He continued to use marijuana after
the Appraisal Board granted him a trainee
registration in 2001. His use of marijuana dur-ing
this time may have affected his perfor-mance
in the real estate appraisal business.
Nadine Hicks ( Marshville)— By con-sent,
the Board issued a reprimand to Ms.
Hicks. She must also complete a course in
appraiser liability by December 31, 2004 or
the reprimand will be vacated and a one-month
suspension will be activated on that
date. The Board found that Ms. Hicks
appraised a home located in Charlotte, NC in
September 2001, finding an appraised value
of $ 68,000. On the effective date of the
appraisal, the owner of the subject property
was Richard Strikeleather. Although Re-spondent
had a tax card in her work file indi-cating
that Mr. Strikeleather was the owner,
she listed SS & Associates as the owner in
the appraisal report as she also had an
unrecorded deed that showed the transac-tion
date as August 2000. In the appraisal
report, Respondent indicated that the data
sources for all her comparable sales were
“ Drive by/ MLS Public Records”, when none
of her comparable sales were listed on MLS.
Respondent obtained her comparable data
solely from the local GIS service, which did
not list details of the condition of those sales
and also did not list any sales concessions.
On the appraisal report, she stated that all
comparable sales were in average condition
and that there were no seller concessions,
but there was no evidence in her work file to
support these statements. There were limit-ed
sales of homes in the subject neighbor-hood
that were listed on the local MLS. Sales
that were listed indicate a lower value for the
subject property.
Benny Hilliard ( Winston- Salem)— By
consent, the Board issued a reprimand to
Mr. Hilliard. Mr. Hilliard must also success-fully
complete a course in property inspec-tion,
by September 30, 2004 or the repri-mand
will be vacated and one- month sus-pension
will be imposed as of that date. The
Board found that Mr. Hilliard appraised a
home located in Winston- Salem, North
Carolina on November 15, 2003, finding an
appraised value of $ 149,000. The subject is a
single- family residential dwelling with asso-ciated
site improvements located on a 1.39-
acre site. A private school surrounds the
subject site with the school building and
parking lot to the rear or west of the subject.
The entrance driveway for the school
bounds the north side of the subject site and
the exit driveway for the school bounds the
south side of the subject site. The school and
parking lot lie below the subject site with a
well- landscaped embankment that slopes
down from the subject site to the parking lot.
Additionally, there is a high- tension power
line easement and substation located adja-cent
to the north side of the school and with-in
view of the subject dwelling. There was no
mention of the school or the power lines
within the report.
Nathaniel Holloway ( Durham)— By
consent, the Board suspended Mr.
Holloway’s general certification for a period
of six months. The suspension is stayed until
March 1, 2005. If Mr. Holloway completes a
course in sales comparison and an apprais-er
liability course by that date, the suspen-sion
will be inactive. The Board found that
Mr. Holloway completed an appraisal report
on a property located at 915 Chalice Drive,
Durham, North Carolina, indicating a final
value of $ 200,000 on September 8, 2001. Mr.
Disciplinary Actions
Holloway stated in the appraisal report that
the subject property had an above grade liv-ing
area of 2417 square feet. Of that total, 354
square feet was a den that was not heated
and cooled like the remaining area of the
subject property, and thus should not have
been included in gross living area. The sub-ject
property is a split- level home located in
the Archer Woods subdivision. Mr.
Holloway used three comparable sales in his
report. Two of the sales were in Westwood
Estates, which is a somewhat superior sec-tion
of a subdivision connected to the sub-ject
subdivision. One of those sales was a
two story and one was a one and a half story,
yet Mr. Holloway made no adjustments for
design or location. The third sale was from
the subject subdivision. By utilizing the
incorrect square footage for the subject and
by failing to make appropriate adjustments
for differences in design and location in the
appraisal report, the final value for the sub-ject
property was higher than it should have
been.
Sandra Keith ( Winston- Salem)— By
consent, the Board suspended Ms. Keith’s
residential certification for a period of six
months. The suspension is stayed until
March 1, 2005. If Ms. Keith takes a sales com-parison
course and a course in appraiser lia-bility,
the suspension shall be inactive. The
Board found that Ms. Keith and another
appraiser performed an appraisal on a prop-erty
located at 2668 S. Stratford Road,
Winston- Salem, NC, indicating a final value
of $ 251,000 as of April 8, 2002. The appraisal
was made “ as is”. The subject property was
a vacant two- story building located on a .52
acre lot that was zoned LO- S ( limited office –
special use). It was located on a major four
lane road, and was surrounded by proper-ties
which were either vacant or were being
used for non- residential purposes. Ms. Keith
was aware that the borrower owned several
residential rental properties, and believed
that she was planning to make the subject
property her home. She appraised the prop-erty
as residential, indicating in the appraisal
report that the “ highest and best use” was
the present use as a single- family residence.
By appraising the property as residential,
the borrower was able to obtain financing at
more favorable rates. The subject had been
used as an office for at least two years prior
to the appraisal report and was being used
as a mortgage company office at the time of
the Board’s investigation. The highest and
best use of the property should have been
indicated as commercial. Ms. Keith used
three single- family residences as compara-ble
sales. Even if she had appraised the
property to its correct highest and best use,
the value would not have been significantly
different.
B. Carter Kennemur ( Zebulon)— By
consent, the Board suspended Mr.
Kennemur’s general certification for a period
of one year effective September 15, 2004, the
first month of which shall be active. In addi-tion,
Mr. Kennemur agrees that he will per-form
no more appraisals for condemnation
or eminent domain proceedings until he
have successfully completed 30 hours of
education regarding condemnation apprais-ing.
The Board found that Mr. Kennemur
and another appraiser appraised a property
located in Navassa, NC in September 2002,
with an effective date of April 2000. The sub-ject
property consists of approximately 196
acres of undeveloped, heavily wooded land.
Brunswick County had acquired 35 acres of
the subject property in order to expand a
wastewater treatment plant. Mr. Kennemur
valued the subject property before the tak-ing
at $ 3,472,000. He valued 163.8 acres of
upland at $ 21,000 per acre and 32 acres of
wetland at $ 1,000 per acre. He valued the
160.748 acres that remained after the taking
at $ 2,060,000, a difference of $ 1,412,000 for the
value of the 35 acres taken. He used four
sales in their report. Three of the four sales
were developed lots in an industrial park,
complete with access streets and utility serv-ice.
These sales ranged from $ 20,530 to
$ 29,596 per acre, and ranged from 6.69 to
12.81 acres. These sales were not truly com-parable
to the subject property, and Mr.
Kennemur made inadequate adjustments to
these sales. The other sale was a lot near the
subject that contained 60.1369 acres and that
sold for $ 1,300,000. Although that site was
improved with an old fertilizer plant, since
the lot was already cleared it would have
taken substantially less cost to develop it as
opposed to the subject site, which was heav-ily
wooded. Forty acres were usable upland
and the remaining were wetlands. Mr.
Kennemur stated in the appraisal report that
the price per acre was $ 32,500 based on 40
acres of upland, and $ 21,617 per acre straight
through; however, he used a figure of $ 32,500
per acre in the appraisal. This sale had sig-nificant
frontage along the Brunswick River
and was purchased by a boat manufacturing
company specifically because it had river
frontage south of a railroad bridge tender.
Although a large portion of the sales price
was paid by the county, Mr. Kennemur did
not note this fact in the appraisal report or
make any adjustments for it. There were larg-er
acreage sales available that were located
further in distance than the comparables
used, but were much more similar than the
comparables used. These sales ranged
$ 2,333 to $ 8,405 per acre. In the after condi-tion,
Mr. Kennemur valued the upland at
$ 15,750 per acre, and the wetlands at $ 1000
per acre. He used the same four comparable
sales as in the before condition, then stated
the property was diminished by 25% by the
taking. There was insufficient information
contained in the work file to support this
adjustment. The appraisal report did not
comply with USPAP Standards Rule 2- 2( c) in
that the report did not disclose the scope of
work, nor did it describe the appraisal pro-cedures
followed in the valuation of the
property in the after condition.
John Kennemur ( Zebulon)— By con-sent,
the Board suspended Mr. Kennemur’s
residential certification for a period of one-year
effective September 15, 2004, the first
month of which shall be active. In addition,
Mr. Kennemur agrees that he will perform
no more appraisals for condemnation or
eminent domain proceedings until he have
successfully completed 30 hours of educa-tion
regarding condemnation appraising.
The Board found that Mr. Kennemur and
another appraiser appraised a property
located in Navassa, NC in September 2002,
with an effective date of April 2000. The sub-ject
property consists of approximately 196
acres of undeveloped, heavily wooded land.
Brunswick County had acquired 35 acres of
the subject property in order to expand a
wastewater treatment plant. Mr. Kennemur
valued the subject property before the tak-ing
at $ 3,472,000. He valued 163.8 acres of
upland at $ 21,000 per acre and 32 acres of
wetland at $ 1,000 per acre. He valued the
160.748 acres that remained after the taking
at $ 2,060,000, a difference of $ 1,412,000 for the
value of the 35 acres taken. He used four
sales in their report. Three of the four sales
were developed lots in an industrial park,
complete with access streets and utility serv-ice.
These sales ranged from $ 20,530 to
$ 29,596 per acre, and ranged from 6.69 to
12.81 acres. These sales were not truly com-parable
to the subject property, and Mr.
Kennemur made inadequate adjustments to
these sales. The other sale was a lot near the
subject that contained 60.1369 acres and that
sold for $ 1,300,000. Although that site was
improved with an old fertilizer plant, since
the lot was already cleared it would have
taken substantially less cost to develop it as
opposed to the subject site, which was heav-ily
wooded. Forty acres were usable upland
and the remaining were wetlands. Mr.
Kennemur stated in the appraisal report that
the price per acre was $ 32,500 based on 40
13
Disciplinary Actions
acres of upland, and $ 21,617 per acre straight
through; however, he used a figure of $ 32,500
per acre in the appraisal. This sale had sig-nificant
frontage along the Brunswick River
and was purchased by a boat manufacturing
company specifically because it had river
frontage south of a railroad bridge tender.
Although a large portion of the sales price
was paid by the county, Mr. Kennemur did
not note this fact in the appraisal report or
make any adjustments for it. There were larg-er
acreage sales available that were located
further in distance than the comparables
used, but were much more similar than the
comparables used. These sales ranged
$ 2,333 to $ 8,405 per acre. In the after condi-tion,
Mr. Kennemur valued the upland at
$ 15,750 per acre, and the wetlands at $ 1000
per acre. He used the same four comparable
sales as in the before condition, then stated
the property was diminished by 25% by the
taking. There was insufficient information
contained in the work file to support this
adjustment. The appraisal report did not
comply with USPAP Standards Rule 2- 2( c) in
that the report did not disclose the scope of
work, nor did it describe the appraisal pro-cedures
followed in the valuation of the
property in the after condition.
Karen Faith Mims ( Four Oaks)— By
consent, the Board accepted the voluntary
surrender of Ms. Mim’s residential
certification.
Dexter G. Moore ( Grifton)— By con-sent,
the Board suspended Mr. Moore’s gen-eral
certification for a period of six months.
Mr. Moore also agreed to successfully com-plete
a course in condemnation appraising
by May 1, 2005. If he completes the course
by that date, only three months of the sus-pension
shall be active. The Board found
that Mr. Moore performed an appraisal of 47
acres of land located in Rocky Mount, North
Carolina in October 2002, with an effective
date of January 4, 2001. His client was the
owner of property, which was subject to con-demnation.
The condemnation involved the
taking of about 1.5 acres of the land for a
sewer pump station and a sewer easement.
Part of the subject was in a 100- year flood
plain and the other part was in a 500- year
floodplain. The 1.5 acres taken during the
condemnation was from the center and high-est
part of the property. The entire property
was flooded during Hurricane Floyd in
September 1999, which was over a year
before the taking. Mr. Moore stated that the
land was worth $ 470,000 before the taking
and $ 27,000 after the taking. He used 3 sales
in his appraisal to value the property in the
before condition. These sales were superior
to the subject in location and drainage, yet
Mr. Moore did not make adjustments for
drainage. Mr. Moore stated that in the after
condition, the property was worth only $ 600
per acre. Although he had supporting infor-mation
in his file from several local develop-ers
concerning the difficulty of developing
the property in the after condition, he had
no support in the appraisal report for this
opinion of value.
E. Lindsay Morris ( Troy)— By consent,
the Board suspended Mr. Morris’s residen-tial
certification for three months effective
October 1, 2004. The Board found that Mr.
Morris appraised the subject property locat-ed
in Albemarle, NC in December 1998, indi-cating
a final value of $ 66,000. Although
there was a buyer and seller name listed on
the appraisal report, Mr. Ramsey failed to
identify a sales price, and failed to address
the sales contract. The subject property
transferred two times on December 22, 1998.
It first sold for $ 38,000, and then immediately
sold for $ 66,000. On his appraisal report, Mr.
Morris failed to identify the client. He also
failed to state the type of reporting format
used for the appraisal report. In addition, his
work file was not complete in that it did not
contain copies of his limiting conditions and
his certification.
Gina Morris ( Salisbury)— By consent,
the Board issued a reprimand to Ms. Morris.
Ms. Morris agrees to take a sales comparison
course and a course in appraiser liability by
April 30, 2005. If she does not take these
courses before this date, the reprimand will
be vacated and a two- month active suspen-sion
will be activated. The Board found that
Ms. Morris, working under the supervision
of a state- certified residential appraiser,
appraised a home located in Charlotte, NC in
June 2002, finding an appraised value of
$ 105,000. The subject is a mostly brick 1126
square foot home, with three bedrooms and
two bathrooms. The sales used in the ap-praisal
report were all of similar size ( 1001 to
1048 square feet) and age ( all 53 years old),
and were located within .5 miles of the sub-ject.
They were located in a neighborhood
that was superior to the subject neighbor-hood
in maintenance and appeal, yet Ms.
Morris made no adjustments for location.
The sales used in the report were $ 118,500,
$ 104,900 and $ 125,000. The “ customer esti-mated
value” on the appraisal order form
was $ 105,000. The property was foreclosed
in June 2003 for $ 50,000, sold by the lending
institution for $ 48,000 in November 2003 and
sold again in December 2003 for $ 84,000.
John Norwood ( Belmont)— By con-sent,
the Board suspended Mr. Norwood’s
residential certification for a period of six
months effective November 1, 2004. If Mr.
Norwood takes a class in sales comparison
course and the 15- hour National USPAP
course, only the first month of the suspen-sion
shall be active. The Board found that
Mr. Norwood appraised a home located in
Rutherfordton, NC in February 2001, finding
an appraised value of $ 74,000. The subject is
a 1498 square foot ranch style home, with
three bedrooms and one bathroom. It was
63 years old at the time of the appraisal, and
in average condition. The subject street con-tains
manufactured homes, both single and
doublewide manufactured homes, block
homes, and deteriorating buildings, none of
which were mentioned in the appraisal
report. Mr. Norwood chose sales from supe-rior
areas within a mile of the subject neigh-borhood,
where the homes were of similar
age, but the homes in those areas were well
maintained and frequently updated. The
sales used in the appraisal report were supe-rior
in quality to the subject, having improve-ments
such as 10' ceilings, fresh interior
paint, pine floors, new carpet and vinyl, etc.,
yet Mr. Norwood made an adjustment for
condition to only one of his sales, and that
was for $ 1000. He made no adjustment for
the fact that his comparable sales were locat-ed
in superior neighborhoods.
Chappell V. “ Dick” Parker ( Smith-field)—
Following a hearing, the Board
revoked Mr. Parker’s general certification.
The Board found that Mr. Parker appraised a
property located in Wayne County in March
2003. His final estimate of value for the prop-erty
was $ 560,000. The subject property was
a new 3,855 square foot custom built home
situated on a rural lot. Mr. Parker’s work file
contained a detailed list of the specifications
for construction for the subject. The original
total cost to build was $ 398,312; however, the
cost figure on the subject increased after all
change orders and adjustments were made.
Mr. Parker stated in the appraisal report that
the gross living area of Comparable Sale No.
1 was 4,361 square feet, when it actually con-tained
5,061 square feet. He reported that
Comparable Sale No. 2 had four baths and a
double garage, when it actually had four and
a half baths and a three- car garage. He
reported that his third sale sold on April 20,
2002, when it actually sold on April 20, 2000.
Mr. Parker had MLS sheets in his work file
that indicated the correct information for his
three comparable sales, but he reported
incorrect information in his appraisal report
without any explanation. Mr. Parker’s three
14
Disciplinary Actions
comparable sales were located in a private
country club known as Walnut Creek, which
has a golf club, swimming pool, clubhouse
and various other amenities. Lot values for
properties in Walnut Creek run from about
$ 40,000 for interior lots to $ 150,000 for lots on
the golf course or with a lake view. Two of
his three comparable sales were located on
the golf course, and one was located on the
lake; their lot values all exceeded $ 125,000.
Mr. Parker stated in the Cost Approach in his
appraisal report that the subject site was
worth $ 25,000. Despite the significant differ-ences
in lot values between the subject and
the comparable sales, Mr. Parker made no
adjustment for site for his first two compara-ble
sales, and made a $ 12,500 negative
adjustment to his third sale. The subject was
located on a road in a rural area. It was not
in a subdivision and had no subdivision
amenities or view, yet Mr. Parker made no
adjustments for differences in location for
the subject property. His comparable sales
sold in December 1999, April 2000 and
October 2001, while the appraisal was per-formed
in March 2003. Mr. Parker chose the
three highest priced sales that had ever sold
in the county. Another appraiser performed
a review on Mr. Parker’s appraisal report in
April 2003. In his review, he used three sales
that were much more comparable to the
subject. Those sales ranged in price from
$ 283,000 to $ 347,460 and ranged from 3223
square feet to 3965 square feet. The oldest
sale he used was from June 2001. The
reviewer valued the property at around
$ 300,000. There were several other sales that
were more comparable to the subject prop-erty.
Those sales ranged in price from
$ 275,000 to $ 315,000 and ranged from 2950 to
4310 square feet. By using sales that were not
comparable to the subject property, and by
not making appropriate adjustments for the
differences, Mr. Parker inflated the value the
subject property. Mr. Parker had previously
been disciplined by the Appraisal Board in
two separate consent orders. In the first con-sent
order, his certification was actively sus-pended
for three months, and in the second,
his certification was actively suspended for
two months.
John Parrish ( Concord)— By consent,
the Board suspended Mr. Parrish’s residen-tial
certification for a period of two months.
The suspension is stayed until April 30, 2005.
If Mr. Parrish takes a sales comparison
course and the course in the role of a super-visor
by that date, the suspension will be
inactive. Mr. Parrish also agrees that he will
not act as a supervisor for either of his
trainees until he has completed the course
in the role of a supervisor. The Board found
that Mr. Parrish and a trainee appraised a
home located in Charlotte, NC in June 2002,
finding an appraised value of $ 105,000. The
subject is a mostly brick 1126 square foot
home, with three bedrooms and two bath-rooms.
The sales used by in the appraisal
report were all of similar size ( 1001 to 1048
square feet) and age ( all 53 years old), and
were located within .5 miles of the subject.
They were located in a neighborhood that
was superior to the subject neighborhood in
maintenance and appeal, yet Mr. Parrish
made no adjustments for location. The sales
used in the report were $ 118,500, $ 104,900
and $ 125,000. The “ customer estimated
value” on the appraisal order form was
$ 105,000. The property was foreclosed in
June 2003 for $ 50,000, sold by the lending
institution for $ 48,000 in November 2003 and
sold again in December 2003 for $ 84,000.
Jack A. Ramsey, Jr. ( Mt. Ulla)— By
consent, the Board suspended Mr. Ramsey’s
residential certification for a period of three
months. If Mr. Ramsey takes a course in
manufactured housing and a course in
appraiser liability by December 1, 2004, the
suspension will be inactive. The Board
found that Mr. Ramsey appraised a home
located in Dallas, NC in August 2003, indicat-ing
a final value of $ 122,500. The subject was
a modular home, and the appraisal was
made “ as is.” The tax value on the property
at the time of appraisal was $ 143,690. There
were no sales in the immediate area that
could be used as comparable sales, and Mr.
Ramsey did discuss in the report that the
manufactured/ modular home resale market
in the subject areas was minimal. Mr.
Ramsey made a minus $ 19,100 adjustment
for Sale No. 1 having superior quality of con-struction.
He made positive adjustments of
$ 8,300 for Sale No. 2 and $ 7,750 for Sale No. 3,
due to both having inferior quality of con-struction
compared to the subject. There
was no support in the appraisal report or
work file for these adjustments. Although
there was a buyer and seller name listed on
the appraisal report, Mr. Ramsey stated in
the report that there was no contract pend-ing
on the subject.
Leslie Robinson ( Kings Mountain)—
By consent, the Board suspended Ms.
Robinson’s residential license for a period of
one year. The first month of the suspension
will become active on September 1, 2004.
The remaining months are stayed until
December 1, 2004. Ms. Robinson also agrees
to take two courses approved by the Ap-praisal
Board; a sales comparison course
and the 15- hour national USPAP course.
These courses must be completed by
December 1, 2004, or the remainder of the
suspension will become active. The Board
found that a trainee working under the
supervision of Ms. Robinson appraised a
2120 square foot home located in Monroe,
NC in December 2003, finding an appraised
value of $ 230,000. Sales in the subject subdi-vision
were all smaller than the subject prop-erty,
ranging from 1143 to 1804 square feet, so
Ms. Robinson chose sales from other subdi-visions
located near the subject subdivision.
Those sales were all of similar size, and
adjustments were made for differences in
age. The sales were located in neighbor-hoods
that were superior to the subject
neighborhood in maintenance, appeal and
quality, yet Ms. Robinson made no adjust-ments
for those factors. The unadjusted
sales prices of the comparable sales were
$ 231,000, $ 235,000 and $ 252,000. The “ cus-tomer
estimated value” on the appraisal
order form was $ 220,000. The appraisal was
done for refinancing purposes, but the loan
did not close.
Richard Simmons ( Charlotte)— By
consent, the Board suspended Mr.
Simmons’ residential certification for a peri-od
of two ( 2) years with the first year being
active. The Board found that Mr. Simmons
Respondent appraised a property located in
Charlotte, NC in May 2002, finding an
appraised value of $ 255,000. The appraisal
report, dated May 24, 2002, was completed
for the sale of the property. The closing state-ment
indicated a contract price of $ 255,000.
Mr. Simmons appraised the subject property
again on January 9, 2003, indicating a final
value of $ 265,000. The appraisal report,
dated January 9, 2003, was completed for the
refinancing of the property. Sales in the sub-ject
neighborhood ranged from $ 153,000 to
$ 218,000. In the 2002 appraisal report, Mr.
Simmons adjusted approximately $ 22.50/
square foot for Gross Living Area. In the 2003
report, Mr. Simmons adjusted approximately
$ 15.00/ square foot. There was no explana-tion
as to why the adjusted value changed
by 33% in approximately 8 months. The pho-tographs
of the comparables in both of the
appraisal reports were not of the correct
properties.
Donald Spake ( Hickory)— By con-sent,
the Board issued Mr. Spake a repri-mand
and ordered him to take a course in
condemnation or eminent domain apprais-ing.
If he does not complete the course by
March 1, 2005, the reprimand will be vacated
and a one- month suspension will be activat-
15
Disciplinary Actions
16
NORTH CAROLINA
APPRAISAL BOARD
P. O. Box 20500
Raleigh, NC 27619- 0500
4,500 copies of this document were printed at a cost of $. 69 per copy.
PRESORTED STD
U. S. Postage
PAID
Permit No. 1978
RALEIGH, NC
ed. The Board found that Mr. Spake per-formed
an appraisal for condemnation pur-poses
of a property located in Gastonia, NC.
Mr. Spake estimated that the property mar-ket
value was $ 259,000 before the taking ( it
was a total take). The jury awarded $ 263,000
in damages to the property owner. The sub-ject
property consists of a half- acre site,
improved with a split- level style single- family
dwelling. On the effective date of the
appraisal the property was zoned O & I 1C.
He made a positive adjustment for costs to
convert the subject to an office, when he
should have made a negative adjustment for
those expenditures. Although Mr. Spake stat-ed
that there was a shortage of similar sales
within the city and that he therefore used
office sales from another area, there were
several sales of dwellings converted to com-mercial
use that were located closer to the
subject.
John Vestal ( Charlotte)— By consent,
the Board issued a reprimand to Mr. Vestal.
Mr. Vestal also agreed to successfully com-plete
a course in sales comparison by March
1, 2005. If he does not complete the course
by that date, the reprimand will be vacated
and a one- month suspension will be activat-ed.
The Board found that Mr. Vestal per-formed
an appraisal of a property located in
Charlotte, NC in August 22, 2001, finding an
estimated value of $ 110,000. He used three
comparable sales that were all located out-side
the subdivision. Those properties were
all newer than the subject, were superior in
quality to the subject and were in superior
neighborhoods, yet Mr. Vestal failed to make
adequate adjustments for those factors.
There was only one sale in the subject
subdivision that had sold within a year of
the Mr. Vestal’s appraisal. This sale was sig-nificantly
smaller than the subject and
would have required excessive adjustments.
Mr. Vestal should have mentioned the sale
in his report as it was within the subject
subdivision.
Samuel Walters ( Winston- Salem)—
By consent, the Board suspended Mr.
Walter’s residential certification for a period
of six months. The suspension is stayed until
March 1, 2005. If Mr. Walters takes a sales
comparison course and a course in apprais-er
liability, the suspension shall be inactive.
The Board found that Mr. Walters and
another appraiser performed an appraisal
on a property located at 2668 S. Stratford
Road, Winston- Salem, NC, indicating a final
value of $ 251,000 as of April 8, 2002. The
appraisal was made “ as is”. The subject
property was a vacant two- story building
located on a .52 acre lot that was zoned LO-S
( limited office – special use). It was located
on a major four lane road, and was sur-rounded
by properties which were either
vacant or were being used for non- residen-tial
purposes. Mr. Walters was aware that the
borrower owned several residential rental
properties, and believed that she was plan-ning
to make the subject property her home.
He appraised the property as residential,
indicating in the appraisal report that the
“ highest and best use” was the present use
as a single- family residence. By appraising
the property as residential, the borrower
was able to obtain financing at more favor-able
rates. The subject had been used as an
office for at least two years prior to the
appraisal report and was being used as a
mortgage company office at the time of the
Board’s investigation. The highest and best
use of the property should have been indi-cated
as commercial. Mr. Walters used three
single- family residences as comparable
sales. Even if he had appraised the property
to its correct highest and best use, the value
would not have been significantly different.
Michael Wright ( Concord)— By con-sent,
the Board issued a reprimand to Mr.
Wright. He must also successfully complete
a sales comparison course by April 1, 2005,
or the reprimand will be vacated and a one-month
suspension will be imposed as of that
date. The Board found that Mr. Wright per-formed
an appraisal in October 2000 of a
property located in Charlotte, NC, finding an
appraised value of $ 106,000. The appraisal
report incorrectly indicated that the subject
had two fireplaces when it only had one. Mr.
Wright adjusted the square footage differ-ences
for two of his comparable sales at $ 15
per square foot and at $ 20 per square foot for
one comparable sale, when the square
footage adjustment for all sales should have
been $ 20 per square foot. Mr. Wright stated
in the income approach section of the
appraisal report that the market rent for the
subject property would be $ 950 and the
appropriate gross rent multiplier is $ 110, but
he provided no support for those figures in
his report or within his work file. The final
indicated market value would have been
slightly lower if not for the errors in the
appraisal report.
Disciplinary Actions